FCA Regulatory Priorities 2026: What They Mean for MGAs and the Future of Delegated Underwriting

The FCA published its Regulatory Priorities for Insurance 2026 on 24th February 2026, its first step in a process that will see it replacing more than 40 separate portfolio letters with a single annual sector-focused report for each of 9 high level sector-specific publications. Insurance is leading the way, with the rest due to be published in March 2026.

This marks a major shift in how the regulator communicates expectations, reflecting perhaps what has become an established approach by the PRA. It introduces a set of priorities that will shape the regulatory operating environment across conduct and consumer protection for the solo and dual-regulated sector in the year ahead. For MGAs, whose models sit at the intersection of innovation, distribution, and underwriting expertise, this is a valuable summary of the regulatory work that does, will or might affect the way they operate.

While the FCA’s overall message centres on growth, proportionate oversight, and strengthening consumer outcomes, the detailed priorities highlight key areas where MGAs will feel both opportunities and pressure.

One of the FCA’s most striking messages is its intention to ensure regulation enables, rather than constrains, sustainable market growth. The report emphasises the need for a competitive and innovative UK insurance market, one that attracts investment, supports new entrants, and develops products aligned to changing consumer and business needs.

For MGAs, this signals a supportive environment for:

• Developing products for emerging risks, such as cyber, climate-related exposures, or intangible asset risks.
• Leveraging AI and data models across underwriting, claims, and distribution.
• Experimenting via regulatory testbeds, including the FCA’s AI Lab and Supercharged Sandbox.

The FCA “encourages insurers to be confident to innovate,” emphasising opportunities for AI-enabled efficiency while reinforcing the requirement for strong governance and monitoring of outcomes.

MGAs, which often excel at innovation due to their specialist expertise and flexible operating structures, are well-positioned to flourish within this evolving regulatory approach — provided they can demonstrate robust oversight, effective data strategies, and fair outcomes.

Consumer understanding and claims handling sit at the top of the FCA’s priority list.  The regulator makes clear that too many consumers still experience delays, misunderstandings about cover, or poor handling when making a claim.

The FCA now expects firms, including intermediaries and MGAs, to:

• Communicate clearly and test consumer comprehension;
• Respond promptly, fairly, and transparently to claims; and
• Monitor actual outcomes and identify where products are not delivering as intended.

This reflects growing scrutiny following the Which? super-complaint and the FCA’s investigations into home and travel claims. The regulator also plans to expand its review of outsourced and delegated authority arrangements — a development directly relevant to MGAs.

While MGAs have long been aware of the need to operate robust governance over delegated claims administration (whether provided by a third-party administrator or ‘up the chain of distribution’ by their capacity provider), this priority indicates that regulatory and consumer expectations are rising. Strong oversight frameworks and clear evidence of good customer outcomes will be vital.

The FCA identifies a persistent access gap, especially among vulnerable customers and underserved groups. Some of the most vulnerable individuals lack home contents insurance, suitable travel cover, or affordable motor insurance.

The regulator’s renewed focus includes:

• Supporting the Government’s Financial Inclusion Strategy;
• Collaborating with Fair4All Finance and the housing sector to widen uptake among social renters;
• Improving travel insurance underwriting transparency for consumers with pre-existing mental health conditions;
• Reducing costs and ensuring fair value in premium finance, where APR levels and affordability remain under review.

MGAs can play a central role here. Their agility and product-specialist capabilities mean they are well‑placed to design or refine products that serve niche or vulnerable segments, and to demonstrate tailored value assessments reflecting real-world needs.

The simplification of insurance rules remains a “live” and active FCA priority. The regulator recognises that the Handbook has grown complex over time and is working to streamline rules, reduce reporting burdens, and rely more heavily on existing cross‑sectoral requirements such as Consumer Duty.

Key areas of simplification work under way include:

• Removing or consolidating product-specific rules;
• Reviewing conflicts of interest requirements and reporting rules;
• Considering removal of certain pricing practice returns;
• Consulting on Consumer Duty’s application to non‑UK business.

For MGAs, simplification is welcome, particularly given ongoing concerns about regulatory proportionality and the need for clarity where the MGA model is not explicitly referenced in FCA frameworks. The FCA continues to classify MGAs under the broad category of insurance intermediaries. While this avoids prescriptive regulation, it also means MGAs must interpret expectations designed for a wide range of business models. It has previously said it remains open to revisiting this question if circumstances change.

This remains an area where we expect to see ongoing dialogue between the MGA community and the FCA as the parties engage and consider the shape of future regulatory design.

The Digital Markets, Competition and Consumers Act 2024 (DMCCA) is coming into focus, and the FCA has signalled that it will begin consulting on Handbook updates to reflect the Act.

For MGAs, this intersects with:

• Marketing and digital customer journeys;
• Online distribution channels, including price comparison platforms;
• Transparency and data use;
• Oversight of digital claims or automated decision-making.

Additionally, the FCA will continue to explore AI risks and opportunities, including barriers to adoption across underwriting, customer service, and claims. The regulator’s growing interest in AI makes clear that firms using advanced analytics must demonstrate both innovation and responsible governance.

Claims oversight is not only a consumer-outcomes issue; it is also a supervisory priority. The FCA will continue:

• Investigations into home and travel claims;
• Oversight reviews of outsourced claims and delegated authority models;
• Work to ensure storm and flooding claims are handled consistently.

MGAs must be prepared to demonstrate claims governance frameworks that are transparent, well‑structured, and evidence‑based — especially where third-party administrators are used.

The FCA’s 2026 priorities offer welcome clarity, but also raise expectations and will require careful assessment against individual operating models. MGAs should consider the following steps:

1. Reassess governance and oversight frameworks, particularly around claims, outsourcing, and data-driven underwriting.

2. Review customer touchpoints, ensuring communications are clear and Consumer Duty expectations are embedded into real-world product performance.

3. Engage with the FCA’s call for dialogue, especially on simplification, delegated authority oversight, and AI-enabled innovation.

4. Explore opportunities in access and inclusion, where MGAs are often best positioned to tailor products for underserved customer profiles — an area the FCA is prioritising.

5. Continue investing in innovation, an area where the regulator is signalling support for growth through technology; MGAs should take advantage of FCA testbeds, sandboxes, and innovation pathways.

The FCA’s 2026 regulatory priorities provides a more streamlined and strategic view of what the regulator expects from the insurance market. While MGAs remain captured under the broad label of “insurance intermediaries,” the flexibility of the MGA model means these priorities carry both opportunity and regulatory exposure.

The message from the FCA is clear: growth is encouraged, innovation is welcome, and simplification is under way but firms must continue to deliver strong consumer outcomes, robust oversight, and transparent, fair value.

For MGAs, this is an opportunity to invest in the futurte: to showcase the agility, expertise, and forward‑thinking practices that define the sector, and to help shape the future of a smarter regulatory environment.

Read the FCA’s full report: https://www.fca.org.uk/regulatory-priorities

This article has been produced for the MGAA by Artex UK Advisory, the MGAA compliance and regulatory partner.