What is the FCA’s ICOBS?
The U.K. Financial Conduct Authority’s (FCA) Insurance Conduct of Business Sourcebook (ICOBS), first published in September 2016, is part of the business standards portion of the FCA Handbook, a consolidated document containing a complete record of FCA legal instruments.
The overall aim of ICOBS is to ensure that customers are treated fairly and are given “clear, fair information” when they are sold insurance products.
Key 2026 Regulatory Changes to ICOBS
The FCA is currently modernizing the Handbook to reduce complexity while increasing accountability.
- Rule Simplification (PS25/21): The FCA has replaced the “contracts of large risk” concept with a new definition for “Large Commercial Customers”. This clarifies which corporate clients fall outside certain ICOBS and Consumer Duty protections.
- Multi-Occupancy Building Insurance (ICOBS 6A.7): As of 2026, brokers and insurers must provide specific, transparent disclosures to leaseholders regarding commissions and policy terms to ensure they are not unfairly penalized by “hidden” costs.
- Non-Financial Misconduct (COCON): Effective May 2026, the FCA has explicitly linked workplace conduct to the “Fit and Proper” test. Serious non-financial misconduct now directly impacts a firm’s standing under ICOBS and SYSC rules.
Who does ICOBS apply to?
ICOBS applies to firms that carry out general insurance business and pure protection insurance business, also referred to as “non-investment insurance,” from an establishment maintained by it, or its appointed representative, in the United Kingdom.
Covered activities include, but are not limited to:
- Insurance distribution activities
- Effecting and carrying out contracts of insurance
- Managing the underwriting capacity of a Lloyd’s syndicate as a managing agent at Lloyd’s
- Communicating or approving financial promotions
- Activities connected to the above
What are the recordkeeping requirements under ICOBS?
ICOBS establishes record keeping requirements for the following types of records:
- Record of election to comply with COBS rule for pure protection policies;
- Customer eligibility in relation to policy benefit claims;
- Suitability and recommendations given;
- Record of compliance with non-discrimination requirements; and
- Treatment of existing customer requirements.
Each type of record must be retained for a defined period of time. Records relating to compliance with the COBS provisions must be retained “indefinitely,” while records applying to eligibility and suitability must be retained for three years. There are no specified retention periods for records of compliance regarding the treatment of customers.
How Smarsh can help firms meet ICOBS recordkeeping requirements
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