The UK's Financial Conduct Authority wants to ensure that closed-book customers, who have life insurance products that are closed to new business, are treated fairly and do not receive less attention than customers who have recently taken out new products.

To this end, it has stopped short of issuing new rules but has instead issued 'guidance' (in document FG 16/8) for life insurers who have closed books for various products that it reviewed earlier in the year. At one point it notes: "The guidance is not intended to create any new requirements but to remind firms of our expectations in relation to existing requirements contained in COBS rules and elsewhere."

On 3 March, the FCA published a report, serial number TR16/2, that contained its findings from its 'thematic' review on the subject. It found that "the picture was mixed," with most firms demonstrating 'good practice' in one or more areas and 'poor practice' in others. The report, according to the latest paper, contained its opinion that firms ought to comply with "consultative non-Handbook guidance."

The FCA wants each firm to satisfy four vague principles or 'outcomes.'

• Outcome 1: The firm’s strategy and governance framework ought to result in the fair treatment of closed-book customers.
• Outcome 2: The firm’s closed-book customers ought to receive clear and timely communications about policy features at regular intervals and at key points in the product life cycle to allow them to make informed decisions.
• Outcome 3: The firm ought to give adequate consideration to, and take proper account of, fund performance and 'policy values' so that it treats its closed-book customers fairly and 'proportionately.'
• Outcome 4: The firm’s closed-book customers ought to be able to discard products that are no longer meeting their needs in a fair and reasonable manner.

Fourteen 'sub-outcomes' also exist.