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GRiD Member Briefing March 2024: FCA Policy Statement PS23/14 affecting income protection through salary sacrifice

GRiD Member Briefing: Policy Stakeholder

In September 2023 the FCA issued Policy Statement PS23/14 including the final rules for multi-occupancy building insurance which came into effect from 31st December 2023.

The policy extends PROD rules to include a new customer type of ‘Policy Stakeholders’ where a person has both:

  • a contractual or statutory obligation to pay for a part or all of the insurance premium, and
  • the obligation arises in relation to the person having an interest and/or benefit in the subject matter of the insurance.

The policy statement includes a specific example of those paying for income protection through salary sacrifice schemes. The statement notes that they may already be classed as customers within the rules (e.g. if they are group policyholders), however, if they are not, it is expected that they would meet the definition of being policy stakeholders. This is because they are paying an amount for the insurance and clearly have an interest in the subject matter of the policy.

Members should consider whether the target customers for any of their products include policy stakeholders and, if so, ensure that their product governance processes in line with PROD rules take the needs of those customers into account.

This summary is for GRiD member use only.

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