The UK Financial Conduct Authority (FCA) published its long-awaited Policy Statement PS25/21: Simplifying the Insurance Rules in December 2025, setting out finalised regulatory changes aimed at streamlining conduct and product governance requirements across the insurance market.
At its core, the FCA’s simplification drive seeks to reduce unnecessary complexity while maintaining robust protections for consumers and smaller commercial customers. The regulator has introduced a series of optional measures, such as greater flexibility on product review frequency, clearer definitions for commercial versus consumer customers (the so-called SME watershed), and the ability for co-manufacturers to appoint a lead firm responsible for product governance compliance under PROD 4.2.
However, the FCA stopped short of allowing Managing General Agents (MGAs) to assume the role of sole product manufacturers under this framework. That outcome has drawn commentary across the market, including from those advocating for regulatory recognition of the unique role MGAs play in product design and distribution.
However, from the perspective of Pro MGA Global Solutions – a principal firm and professional regulatory host working within the delegated authority model – the FCA’s decision reflects a practical and proportionate stance. The MGA model is fundamentally built on delegated authority, where product manufacture, risk appetite, and capital ultimately sit with the carrier.
Treating MGAs as sole manufacturers risks blurring accountability rather than strengthening it, particularly where MGAs do not control pricing parameters, reinsurance structures or balance-sheet exposure in practice.
This distinction is more than semantic. Delegated authority arrangements work because they explicitly allocate responsibilities between insurer and MGA, insurer balance sheet, solvency and ultimate product accountability reside with the capacity provider, while the MGA contributes underwriting expertise, distribution agility and customer insight. Reframing MGAs as sole manufacturers could upend this equilibrium without delivering clear benefits for consumer outcomes.
To my mind, the FCA’s refusal to extend sole manufacturer status to MGAs recognises this operational reality. It reinforces the importance of shared accountability and robust governance, ensuring carriers remain appropriately accountable for the rules that are, and should remain, the bedrock of conduct and product governance oversight.
Looking ahead, the focus for all MGAs should be on embedding strong oversight, transparency and regulatory alignment within delegated frameworks, upholding the integrity of the delegated authority model while meeting regulators’ expectations in practice.
For the full FCA decision and details of the simplification reforms, see the FCA’s policy statement PS25/21: Simplifying the Insurance Rules.
Compliance is critical in the highly regulated insurance industry. Our tailored compliance frameworks and delegated authority oversight ensure that your MGA meets all legal and regulatory standards, giving you the confidence to trade in multiple markets. Get in touch with the Pro MGA Global Insurance Solutions team to find out more.
Meet our expert
Name: Danny Maleary
Job title: CEO, Pro MGA Global Solutions
Get in touch
To speak to the Pro Global team please feel free to reach out to us at:
Lysander PR
To contact our PR team directly please use the link below
View Previous 