Consultation outcome

Pre-paid funeral plan providers and the Financial Services Compensation Scheme

This consultation has concluded

Download the full outcome

Response to the consultation and additional provisions

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Detail of outcome

This consultation response sets out the government’s final policy approach to amending the regulatory framework, which will ensure that the Financial Services Compensation Scheme can operate most effectively for the consumers of pre-paid funeral plan contracts if a regulated funeral plan provider fails.

Following further consideration and engagement with the sector, this document also sets out additional provisions that will:

  • place an additional statutory duty of co-operation on insolvency practitioners
  • make it easier for funeral plan providers that seek to exit the market to transfer their existing funeral plan contracts to another funeral plan provider for regulatory purposes

The government will shortly lay before Parliament the necessary secondary legislation and explanatory memorandum, and will publish a de minimis impact assessment. This legislation will come fully into force on 29 July 2022 - the same time as The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2021.

Original consultation

Summary

The government is consulting on proposals to ensure that the Financial Services Compensation Scheme operates effectively if a regulated pre-paid funeral plan provider fails.

This consultation ran from
to

Consultation description

In January 2021, the government legislated to bring all pre-paid funeral plan providers and intermediaries within the regulatory remit of the Financial Conduct Authority (FCA) with effect from 29 July 2022.

It is now clear that further legislative changes are required to ensure that, from July 2022, the Financial Services Compensation Scheme (FSCS) can operate most effectively for the consumers of pre-paid funeral plan contracts if an FCA regulated provider fails.

The government therefore proposes to make a supplementary statutory instrument to ensure that the FCA can most effectively oversee an orderly wind down of a failed regulated funeral plan provider, thus protecting consumers from the risks posed by a disorderly exit from the market and mitigating the impact on FSCS levy payers.

This consultation document seeks stakeholder views on the government’s proposed amendments to the legislative framework.

This consultation will run from 5 July 2021 until 3 September 2021.

Please submit responses to: FuneralPlans@hmtreasury.gov.uk

Documents

Regulation of pre-paid funeral plans – the role of the FSCS where a regulated funeral plan provider fails: A consultation

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Annex A: Funeral plans consultation – de minimis impact assessment

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Published 5 July 2021
Last updated 21 April 2022 + show all updates
  1. Updated with response to the consultation.

  2. First published.