What CP25/37 Actually Means for Insurance Brokers (Without the Headache!)
Introduction
If you’ve been keeping half an eye on FCA updates over the winter, you’ll know that December 2025 and January 2026 weren’t exactly bursting with insurance‑specific publications. Most of what came out was about crypto, listings, banking models, and sustainability disclosures — all interesting in their own way, but not exactly the stuff that keeps general insurance brokers awake at night.
But there was one publication that does matter: CP25/37 – Targeted Clarifications of Handbook Materials.
It didn’t arrive with fireworks or dramatic headlines, but it’s quietly important because it touches the areas brokers deal with every single day — Consumer Duty alignment, product governance, and client money. In other words, some of the foundations of how you operate.
Into a bit of Detail
So, let’s break it down in a way that may be useful.
Why CP25/37 Matters (Even If It Doesn’t Look Exciting at First Glance)
This consultation paper is the FCA’s way of tidying up parts of the Handbook that have become a bit messy, outdated, or open to interpretation. It’s not a rewrite of the rulebook, but more of a “let’s clear up the grey areas” exercise. And if you’ve ever found yourself debating what PROD really expects, or how Consumer Duty interacts with commercial clients, you’ll know how valuable clarity can be.
The FCA is essentially saying: “We want the rules to be clearer, more consistent, and easier to apply — especially for intermediaries.”
For brokers, that’s good news. Less ambiguity means fewer compliance headaches and fewer moments where you’re left wondering whether your interpretation matches the FCA’s.
The Three Areas Brokers Should Pay Attention To
1. Product Governance (PROD)
PROD has been one of the biggest pressure points for brokers since Consumer Duty arrived. Many firms have been trying to strike the right balance between what’s proportionate and what’s expected — especially for commercial lines where products are more varied and clients more diverse.
CP25/37 aims to clarify:
What “fair value” really means in practice
How distributors should document their role
How responsibilities should be shared across the distribution chain
What’s expected when dealing with SMEs versus larger, more sophisticated clients
This is the FCA acknowledging that the current rules can feel a bit one‑size‑fits‑all, even though the commercial market is anything but.
2. Consumer Duty Alignment
Although Consumer Duty is technically a retail rule, the FCA has repeatedly hinted that many SMEs behave like consumers — and brokers should treat them accordingly.
CP25/37 reinforces that Duty‑style thinking is now the baseline expectation for all customer‑facing activity, even outside strict retail boundaries.
For brokers this means:
Clearer expectations around communications
More emphasis on demonstrating good outcomes
Stronger evidence of how you assess product suitability
A reminder that “we’ve always done it this way” isn’t enough
The FCA isn’t adding new obligations here — they’re just making it harder to misinterpret the existing ones.
3. Client Money (CASS)
Client money rules are already well‑defined, but CP25/37 includes some clarifications designed to remove ambiguity and reduce the risk of inconsistent application.
This includes:
Clearer definitions
More guidance on reconciliations
Better alignment with other parts of the Handbook
If you’re a CASS‑holding broker, this is worth a careful read. If you’re non‑CASS, it’s still useful context — especially if your business model evolves.
What Brokers Should Actually Do with This Paper?
You don’t need to overhaul your processes overnight. CP25/37 is a consultation, not a final rule change. But it’s a great opportunity to sense‑check your current approach.
Here’s where to focus:
Review your PROD documentation: Is it clear, proportionate, and easy to explain to the FCA if they asked tomorrow? If not, now’s the time to tighten it up.
Check your SME processes: Are you treating smaller businesses with the same clarity and care you’d give a retail customer? If not, the FCA’s direction of travel suggests you should.
Look at your client money controls: Even if you’re confident, a quick internal audit never hurts — especially when the FCA is sharpening definitions.
Make sure your rationale is visible. The FCA loves evidence. If you can show your thinking, you’re already ahead.
The Bottom Line
CP25/37 isn’t dramatic, but it’s important. It’s the FCA signalling that they want a cleaner, clearer, more consistent regulatory environment — one where brokers know exactly what’s expected of them and can demonstrate compliance without jumping through unnecessary hoops.
For business insurance brokers, this is a chance to get ahead of the curve, tidy up the grey areas, and make sure your processes are aligned with where the FCA is heading.
If you treat this paper as a quiet nudge rather than a loud warning, you’ll be in a strong position when the final rules land.
The Thread…
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Ask us about what is involved, and we will work with you to provide a bespoke solution that gives you confidence and conviction to positively impact on the customer experience.
And Finally…
Why don’t insurance brokers panic about rule changes?
Because they know the underwriters will tell them eventually.
