Operational resilience

What is insurance law? Insurance law divides into three strands: insurance contract law, setting the rules of the bargain between policyholders and insurers the law of intermediaries, governing insurance arranged via agents (as with the majority of placements) insurance company law, addressing prudential soundness, integrity and the supervision of insurers This Practice Note focuses chiefly on insurance contract law. For wider regulatory material, see our ‘regulation of insurance’ subtopic, including Insurance & Reinsurance—regulatory framework—overview and Insurance & Reinsurance— Regulated activities—overview. Reform of the insurance sector In January 2006, the Law Commission and the Scottish Law Commission (together, the Law Commissions) began consulting on modernising insurance contract law. Their programme was then separated into three streams: consumer insurance law reform: pre-contract disclosure and misrepresentation insurance contract law reform: business disclosure, warranties, insurers’ remedies for fraudulent claims, and late payment insurance contract law...

This Practice Note: provides a synopsis of the three principal forms of fund finance: capital call facilities (often referred to as equity bridge facilities) net asset value ( NAV) (or asset backed) facilities hybrid facilities examines green and sustainability-linked finance, together with some types of fund-related finance, GP/ Manager facilities and co-invest facilities sets out key security and documentary considerations, including financial covenants, representations, undertakings, events of default and prepayment events The capital call facility market is well-established and largely standardised, though approaches to assessing investor creditworthiness and differences driven by varied fund structures can diverge. By contrast, NAV facilities and hybrid facilities are highly flexible, taking multiple forms with differing security packages and covenant...

Connect Connect is the online platform for applications and notifications. Since 1 October 2014, the Prudential Regulation Authority ( PRA) and the Financial Conduct Authority ( FCA) have used Connect, which superseded the former Online Notification and Application System ( ONA). The FCA administers the Connect platform, yet it is employed by both the FCA and PRA. Submissions are directed to the appropriate regulator and, for firms that are dual-regulated, the PRA leads on processing those submissions within the system accordingly......

This Practice Note sets out a summary of the regulatory fees and levies that authorised firms in the UK must pay to support the upkeep of the regulatory system. Why and how are fees and levies imposed? As independent bodies, the Financial Conduct Authority ( FCA) and the Prudential Regulatory Authority ( PRA) do not obtain any funding whatsoever from the government. Each regulator is authorised to levy charges on the regulated community to finance their ongoing work. These regulatory fees supply the FCA and PRA with the financial resources required to discharge their statutory responsibilities under the Financial Services and Markets Act 2000 ( FSMA 2000). Fees are assessed against a framework of 'fee-blocks', with each block corresponding to a distinct segment of the financial services industry. This model promotes consistency across the wider regulated population. Authorised firms may fall within multiple fee blocks and will be...

Organisations caught by the Money Laundering, Terrorist Financing and Transfer of Funds ( Information on the Payer) Regulations 2017 ( MLR 2017), SI 2017/692 must: apply enhanced customer due diligence ( CDD) measures and strengthened ongoing monitoring for any transaction or business relationship with a person established in a high-risk third country not place reliance on a third party established in a high-risk third country The obligation to undertake enhanced due diligence in relation to high-risk third countries applies where there is a relevant transaction and an establishment in a high-risk third country. A relevant transaction is one for which you are required to apply CDD under MLR 2017, reg 27, and being established in a country means: for a legal person, being incorporated in, or having its principal place of business in, that country, or—where a financial...

Introduction to the FCA authorisation process Putting together an application for Financial Conduct Authority ( FCA) authorisation can be demanding. You must assemble and submit numerous documents for the FCA to review. Although application types differ in method, layout and content, the cornerstone for most is the regulatory business plan, commonly called the ‘ RBP’. This Practice Note sets out guidance on building the RBP. The advice applies broadly across the principal financial services arenas: investment, insurance intermediation, mortgages, credit and payment services. By contrast, applications made to the Prudential Regulation Authority ( PRA)—for banks and risk‑taking insurers, for instance—follow a specialist route and fall outside the scope of this Practice Note. For further detail on the FCA’s authorisation journey, see: Obtaining authorisation and fees—overview. See also: FCA— Authorisation, FCA— How to apply for authorisation or registration, and FCA— Sample business...

This Practice Note outlines the key FCA rules applying to appointed representatives ( ARs) who perform regulated activities on behalf of authorised persons. Where the conditions of the AR framework are satisfied, ARs are exempt from obtaining their own authorisation. For guidance on the contractual requirements for ARs, see SUP 15 and the Practice Note: Contract requirements for appointed representatives. For further guidance on arrangements with multiple principals, see Practice Note: Multiple principals and appointed representatives; and for more detail on a principal's responsibility for its ARs, see Practice Note: A principal's responsibility for its appointed representatives. The FCA Handbook also explains how to contact the FCA's Supervision Hub with appointed representatives enquiries. New regime for appointed representatives Together with HM Treasury's call for evidence on the AR regime, in December 2021 the FCA published consultation paper CP21/34 proposing enhancements to its AR...

This Practice Note outlines the legal and regulatory landscape for assessing whether an arrangement amounts to a contract of insurance, and the potential ramifications of undertaking activities connected to such contracts without the requisite regulatory permissions. For more detail, refer to Practice Note: Identifying contracts of insurance in English law—an introduction, and the decision tree in Identifying a contract of insurance—flowchart. The legislative and regulatory background There is no precise or exhaustive statutory definition of a ‘contract of insurance’ in English insurance law. Under the Financial Services and Markets Act 2000 ( Regulated Activities) Order 2001 ( RAO), SI 2001/544, a ‘contract of insurance’ means ‘any contract of insurance which is a contract of long-term insurance or a contract of general insurance’. Determining whether an agreement is a contract of insurance is significant because such contracts are likely to fall within the meaning of a...

In the UK, particular relationships and close ties held by firms may sway how a business is managed, shape consumer outcomes, and hinder effective regulatory oversight. Consequently, the Financial Conduct Authority ( FCA) and the Prudential Regulation Authority ( PRA) exercise specific powers over close links to ensure financial services firms can be adequately supervised. A key impetus for the regime is curbing financial crime and market abuse... The UK close links regime This Practice Note outlines the UK close links regime, highlighting the threshold conditions that authorised firms with close links must meet so that they remain capable of effective supervision by the FCA and PRA, as well as the expectation that firms keep the FCA and/or PRA apprised of their close links on a continuing basis... The concept of ‘close links’ derives from Directive 95/26/ EC (the Post- BCCI Directive), introduced to lessen the...

This Practice Note explains the Financial Conduct Authority ( FCA) training and competence regime. The framework underpins the FCA’s consumer protection objective, aiming to ensure that staff who engage with customers in the regulated financial services market are competent and appropriately qualified to do so. The training and competence framework comprises: an overarching competence obligation (the ‘competent employees rule’) applying to individuals undertaking regulated activity in all UK‑authorised firms (including wholesale firms), as set out in the Senior Management Arrangements, Systems and Controls sourcebook ( SYSC); and more granular requirements for particular retail activities, including the need to obtain a qualification where relevant, as provided in the Training and Competence sourcebook ( TC) The regime should also be viewed in light of the FCA Consumer Duty in Principle 12 of the FCA Handbook ( PRIN 12), which mandates that a firm must act to deliver good outcomes for retail...

Insurance contracts have long seemed enigmatic to law students and practising lawyers. The reason is that they are contracts of the utmost good faith. They are unlike ordinary agreements: they must be treated with exceptional care. The central element of the obligation of utmost good faith, as articulated in the Marine Insurance Act 1906 ( MIA 1906), is the policyholder’s duty to volunteer information to the insurer that would ‘influence the judgment of a prudent insurer’ when deciding whether to accept the risk and what to charge for it (see: MIA 1906, s 18). This has always been a demanding requirement. In truth, it has long been a tall order. It expects the policyholder to second‑guess the insurer’s thinking and make disclosure on that basis. The insurer, by contrast, was free to sit back and remain passive, under no obligation to offer the...

Practice Note Under Part 4A of the Financial Services and Markets Act 2000 ( FSMA 2000), any firm—be it a business, a not-for-profit body or a sole trader—undertaking one or more regulated activities in the UK must be authorised or registered by the Financial Conduct Authority ( FCA) or the Prudential Regulation Authority ( PRA). Banks, credit unions, insurers and managing agents of a Lloyd’s syndicate are required to apply to the PRA for authorisation. Firms seeking approval to conduct any other activities should apply to the FCA. This Practice Note outlines the FCA and PRA authorisation process under FSMA 2000, Pt 4A. It does not cover the FCA’s authorisation and registration processes for consumer credit, payment services or electronic money institutions, which are set out in the following Practice Notes: FCA authorisation of consumer credit firms UK regulation of payment services...

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This Practice Note This Practice Note sets out the contractual obligations between a firm (the principal) and its appointed representative ( AR) as required by Chapter 12 of the Supervision manual ( SUP 12) in the Financial Conduct Authority ( FCA) Handbook. For a summary of an AR’s appointment and functions, see Practice Notes: Appointed representatives and A principal’s responsibility for its appointed representatives. Tougher standards for principals and their ARs applied from 8 December 2022, bringing in further rules and expectations for the agreements governing their relationship. The material in this Practice Note reflects the FCA’s latest rules and guidance on these matters. For further detail on the revised regime, see The new AR regime below and Practice Notes: Appointed representatives and A principal’s responsibility for its appointed representatives. This Practice Note addresses only the contractual position between an AR and its...

Regulatory regime overview Advertising in the UK is governed by legislation alongside self-regulatory industry codes, chiefly the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing ( CAP Code) and the UK Code of Broadcast Advertising ( BCAP Code) (outlined below). Self-regulation plays a central role in the UK; however, broadcast advertising operates within a statutory framework under the Communications Act 2003 ( CA 2003). Marketers should also be mindful of sector-specific rules and codes. The principal laws addressing unfair or misleading commercial practices, which also inform the CAP and BCAP Codes, include: Chapter 1 of Part 4 and Schedule 20 to the Digital Markets, Competition and Consumers Act 2024 ( DMCCA 2024) The Business Protection from Misleading Marketing Regulations 2008 ( BPR 2008), SI 2008/1276 Consumer protection from unfair trading From 6 April 2025, Part 4, Chapter 1 of the DMCCA 2024 largely repealed the Consumer...

This Practice Note explores the Financial Conduct Authority ( FCA)’s expectations of culture within financial services firms, and how regulatory instruments such as the Senior Managers & Certification Regime ( SM& CR) and the Consumer Duty are used to direct FCA supervision and enforcement towards firms’ cultural frameworks. Although the FCA is the dominant conduct regulator in this space, the Prudential Regulation Authority ( PRA) also scrutinises how culture influences prudential risks, which is considered below. Key points addressed include: regulators’ position that culture is a principal driver of conduct outcomes and market integrity the expectation that culture is actively owned and overseen by firms and their senior managers the connection between culture, psychological safety and challenge, and how the SM& CR, amendments to the Conduct Rules to reflect the FCA’s expectations on...

This Practice Note sets out a clear overview of how UK and EU legal frameworks are developing to accommodate digital bonds. It explains key terminology and the digital bond transaction lifecycle, covering the principal documents needed for issuance, with emphasis on smart contracts. It also signposts what practitioners should consider when engaging in digital bond transactions. Summary Digital bonds are now legally recognised in the UK and EU, provided the issuance structure complies with the relevant securities regime, the Prospectus Regulation and/or Regulation ( EU) 2023/1114 on markets in crypto-assets ( Mi CA), and the underpinning distributed ledger technology ( DLT) infrastructure falls within the scope of the competent regulator or sandbox. Practitioners should determine early whether an instrument is a native digital bond or a tokenised form of a traditional bond, as that choice shapes property law status, custody and settlement exposure, and...

THIS PRACTICE NOTE APPLIES TO OCCUPATIONAL AND PERSONAL PENSION SCHEMES Central to the disclosure framework for occupational and personal pension schemes are the Occupational and Personal Pension Schemes ( Disclosure of Information) Regulations 2013, SI 2013/2734 (the 2013 Disclosure Regulations), which took effect on 6 April 2014, and remain the core source within the disclosure regime for such schemes. Nonetheless, further disclosure duties appear, in a fragmented way, across other areas of pensions legislation. Accordingly, this Practice Note concentrates on the disclosure obligations that fall outside the 2013 Disclosure Regulations. For guidance focused specifically on the 2013 Disclosure Regulations, see Practice Note: Disclosure requirements applicable to occupational and personal pension schemes from 6 April 2014. In this Practice Note, any reference to ‘trustees’ is intended to include the managers of a contract-based scheme......

When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...

This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...

Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...

I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...