Regulation of the funeral plan market

On 5 July 2021, the Financial Conduct Authority (FCA) launched a consultation (CP21/20) on its proposals for regulating the pre-paid funeral plan sector. This is part of an extensive regulatory change in the pre-paid funeral plan market.

Under the proposals, the FCA will take over regulation from the Funeral Planning Authority (FPA) on the 29th July 2022.


First Steps

If you are a business in the pre-paid funeral plan market, you should be taking steps now to check how the new rules and regulations affect you and what steps are required to ensure your business is compliant with the new FCA rules and regulations.

1. Does this apply to you?

The proposals will apply to you if you are a:

  • Provider: firm that enters into funeral plan contracts with consumers and/or which carry out funeral plan contracts that have previously been agreed (including in relation to plans that were sold prior to the new rules becoming effective)

  • Intermediary: firm that advises customers on funeral plan contracts or arranges them for customers (this may include funeral directors and writers of wills)

  • Insurance firm: firm that provides life insurance policies that back some funeral plans

  • Trustees and Discretionary Investment Manager: where your role is carried on in relation to trusts that back some funeral plans

  • Trade body: you represent firms that carry out or sell funeral plan contracts


2. What do these rules mean for your business?

  1. You will need to apply for FCA authorisation or become an Appointed Representative (AR) of an authorised firm (principal)

  2. The application gateway opens in September 2021. For applications made after November 2021, the application fee will increase by 40%

  3. 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

  4. From 29 July 2022, it will be a criminal offence for plan providers to carry out funeral plan contracts without authorisation

Types of permissions

  • If you are recommending specific funeral plans to customers, you are very likely to be advising the customers, and so should apply for FCA authorisation to “advise on investments” in relation to funeral plans

  • If you know you will not apply for authorisation, withdraw your application for any reason, or have your application refused, by 29 July 2022, you should stop selling new funeral plans and must, before 29 July 2022, transfer your existing books of business or wind down in an orderly way

How can we help?

MEMA Consultants support firms with obtaining FCA authorisation.

Should you have any queries in relation to the FCA’s final rules for regulated funeral plans, please contact the team at MEMA.