FCA launches Pure Protection Market Study

The Financial Conduct Authority (FCA) launched the Pure Protection Market Study in August 2024, with the stated aim of determining whether the protection market provides fair value for customers¹. The study has examined four product areas: term assurance, critical illness cover, income protection and whole of life insurance¹.

In March 2025 the FCA updated the terms of reference for the study, sharing feedback it had received from the market and adding provisions covering the protection gap and barriers to innovation and investment¹. For intermediaries, the focus points identified were commission agreements, restricted panels and the impact of rebroking¹.

The four product areas under examination are set out below.

Source:¹

The FCA has not published a final report in the material available, and no outcome, remedy or rule change arising from the study has been reported¹. The study covers protection insurance products including life cover, critical illness and income protection, and sits within the FCA's wider consumer protection remit.

Why it matters for households

The study concerns protection policies that pay out on death, serious illness or loss of income, so its scope reaches anyone holding or considering life, income or illness cover. The FCA's stated question is whether the market provides fair value, which places the price households pay relative to the cover and benefits received within the review¹.

The March 2025 update brought the protection gap, meaning the shortfall between the cover people hold and the cover they might need, into the study's terms of reference, alongside barriers to innovation and investment¹. For intermediaries, commission agreements, restricted panels and rebroking were identified as focus points¹. Commission arrangements and restricted panels can shape which products are offered to a customer and how advisers are paid, while rebroking concerns the movement of existing policies between providers.

No findings have been reported, so no change to the price, terms or availability of any protection policy follows from the study at this stage¹. Households holding policies with a cash-in value or considering mortgage protection against family protection are not affected by any announced measure, because none has been announced¹. The tax treatment of protection payouts, including tax on income protection, life and critical illness payouts, is likewise unchanged by anything reported¹.

What happens next

The material available does not set out the FCA's next steps, any publication date for findings, or any proposed remedies, and none has been reported¹. The study's progress is a matter for the Financial Conduct Authority, which launched it in August 2024 and updated its terms of reference in March 2025¹.