The Lloyd’s Market Association has published guidance for managing agents on PS25/21, outlining how firms can apply a more proportionate regulatory approach to commercial and wholesale insurance under revised rules from the Financial Conduct Authority.

Published today, the guidance explains key changes to the FCA rulebook following Simplifying the Insurance Rules and how firms can use greater flexibility in product governance, oversight and review while maintaining appropriate customer outcomes.

PS25/21 is the FCA’s first policy statement to roll back elements of the regulatory burden introduced after the pricing practices market study, which extended retail-focused rules across general insurance.

It highlights a shift towards proportionality based on customer type and size, including a new SME watershed aligned with Financial Ombudsman eligibility. It also expands use of the bespoke exemption, allowing some tailored and open market business for smaller customers to sit outside product governance requirements where appropriate.

Commenting on the guidance, John Levett, head of regulatory affairs at the LMA, said: “PS25/21 is a first step towards a more proportionate regulatory regime for the London market. This guidance has been drafted in collaboration with managing agents and shared with the FCA for comment before publication. Applying these changes should reduce the regulatory burden for the majority of our members.

“There are still changes needed to better support our market and deliver on the international competitiveness and growth objective. Trading in 200 territories, all with their own rules and regulators, is highly complex and can lead to differences between UK and local rules. We will therefore continue to lobby the FCA on developing a regulatory framework appropriate for international business being written in the Lloyd’s market.”

The guidance includes practical commentary, worked examples and decision tools to help firms assess application across bespoke business, specialist risks and group policies.

---