Funeral plans and the FCA’s quarterly consultation

On 10 June 2022, the FCA published its 36th quarterly consultation paper (CP22/10), under which it invites comments on proposed changes to a number of Handbook provisions.

Of particular interest may be the proposed changes set out in chapter 3, under which the FCA sets out amendments to the Compensation Sourcebook (COMP) and the Funeral Plan Conduct of Business Sourcebook (FPCOB).

The FCA proposes the following amendments to:

• COMP 12A . This amendment will allow the FSCS (where a funeral plan provider has been declared ‘in default’ by the FSCS) to make payments to, or on behalf of, a relevant funeral plan provider or to the administrator or liquidator of a funeral plan provider, in respect of any reasonable fees, costs, charges or other expenses incurred for the purpose of the administrator or liquidator of that funeral plan provider complying with a request of the FSCS under section 215B of the Financial Services and Markets Act 2000 (FSMA). The new section 215B will require the administrator or liquidator of a relevant funeral plan provider to provide assistance to the FSCS in certain circumstances.
• FPCOB. The proposed amendments will be in respect of Government legislation which will allow funeral plan undertakings to be transferred for regulatory purposes by ‘deemed transfer’. The new requirement in FPCOB will require the new provider to issue a legally binding undertaking to customers on equivalent or substantially similar terms to the original contract that it will provide them with a funeral.

These proposals follow on from policy decisions taken by HM Treasury in respect of the regulation of funeral plan providers that were announced in April 2022.