PS21/8: Regulation of funeral plans - Feedback to CP21/4 and final rules

Read PS21/8 (PDF)[1]

What we are changing

All firms will need to be authorised by 29 July 2022 to continue carrying out activities relating to funeral plan business.

The rules we consulted on in CP21/4[2] were intended to protect consumers who have taken, or will in future take out, a pre-paid funeral plan product. We want to see an improvement in outcomes for consumers in this sector, with better value products, better sales practices and better controls in place so consumers can be confident they will receive the funeral they expect.

Respondents to the consultation were generally strongly supportive of the objectives we want to achieve through our regulation, though concerns and queries were raised on some aspects of our proposed rules.

We are now making final rules which we consider best meet the objectives set out above, while reflecting feedback from stakeholders on elements of our proposals which may have had an adverse impact on consumers or firms.

Who this applies to

• firms that sell or carry out funeral plan contracts for funerals in the UK
• investment advisers who provide advice on funeral plan contracts
• insurance firms that provide life insurance policies backing some funeral plans
• trustees of trusts and discretionary investment managers who manage the assets of trusts that back some funeral plans
• trade bodies representing firms that carry out or sell funeral plan contracts, including those representing funeral directors
• groups representing consumer interests
• consumers who have a funeral plan, or are thinking of purchasing one

Next steps

Firms engaged in funeral plans activities should consider the final rules set out in this policy statement and consider whether they wish to continue in this market beyond 29 July 2022 when our regulation begins. Our rules will take effect from this date regardless of if a plan provider is authorised and on our Register prior to this date.

Any firms that are not authorised or do not become Appointed Representatives by 29 July 2022 will have to cease trading in relation to funeral plans before FCA regulation takes effect. From 29 July it will be a criminal offence for plan providers to carry out  funeral plan contracts without authorisation.

Firms should consider the proposals set out in CP21/20[3] concerning the outcomes we expect to see for consumers in the event of a regulated firm failing and further proposed rules on FSCS compensation, the resolution of firms and rules concerning product structure.