The UK regulator has released plans to cut outdated or duplicated requirements from its insurance rulebook, in changes aimed at lowering costs while maintaining protections.

The Financial Conduct Authority says the introduction two years ago of a consumer duty setting out standards required of financial services firms dealing with retail customers has provided the opportunity to review rules that may no longer be needed.  

“We are stripping back our insurance rulebook by removing ineffective, outdated or duplicated regulation, as part of our drive to become a smarter regulator and support growth,” director of insurance Matt Brewis said.

“We have listened to industry and we are taking action – in doing so we will reduce regulatory costs and increase the competitiveness of the already world-leading UK insurance sector, while maintaining vital protections for smaller customers.”

The proposed changes, outlined in a consultation paper, include creating a new definition to identify large commercial customers that do not require the same regulatory protections as retail consumers and small businesses.

Other reforms include no longer requiring firms to review the value of their products at least every 12 months, and allowing more flexibility, taking into account risks and characteristics.

The regulator would remove duplicative reporting requirements for employers’ liability, drop some rules for bespoke products and allow a lead firm to take responsibility for product design and approval where there is co-manufacturing.

It would remove specified minimum training and development hours required for insurance and funeral plan employees, and is inviting views on whether the scope of some rules should be limited to UK customers.

“Given the global nature of the commercial market, it is important that our rules deliver proportionate regulation that promotes effective competition,” the consultation paper says.

“We also want to ensure that our rules advance our secondary objective to facilitate the international competitiveness and growth of the UK economy, as far as reasonably possible.”

The regulator previously said it would look at removing more than 100 pages of outdated financial sector guidance when reviewing detailed and prescriptive requirements that cover similar issues.

The FCA is seeking comment on the consultation paper by July 2.