From the middle of 2022, the Government has appointed the Financial Conduct Authority (FCA) to regulate the pre-paid funeral industry.
In a statement the FCA said it intends to consult in spring 2021 on its plans for regulating the sector and the FCA appointment will start 18 months after the government sets out new legislation.
In a statement, the FCA consultation is reported to start in spring 2021 regarding its plans for regulating the sector, including proposed rules and approach to authorising firms. They said:
“Our rules will aim to achieve good outcomes for consumers in this sector. For example, that consumers receive the product they’ve paid for, and that customer funds are looked after and used responsibly. “
“Once we’ve finalised our rules, firms seeking our authorisation will need to submit an application demonstrating how they meet our regulatory standards. We’ll assess all applications and seek additional information from firms where needed, to decide if they can be authorised.
“In order to carry out regulated funeral plan activities, firms must be authorised by us at the point at which we take responsibility for regulation. Continuing with regulated activity without authorisation is a criminal offence. Firms that don’t intend to seek our authorisation should start planning now for how to wind down their business in an orderly way before FCA regulation comes into force.”
In June 2018, the Government launched a call for evidence on the regulation of the sector following concerns about the risk of consumer detriment in the pre-paid funeral market sector. The aim of the investigation was to gather views and information on how the funeral plan market currently operates and the Government’s initial policy proposal to bring all funeral plan providers under the responsibility of the FCA to strengthen the regulatory framework.
In April 2019, the CMA launched a full in-depth market inquiry into the funerals sector after concerns over high price rises, a lack of transparency in the industry and exploitation of vulnerable consumers.
In June 2019, HMT issued their consultation on a policy proposal regarding the regulation of pre-paid funeral plans which outlined a funeral regulation model under the Financial Conduct Authority (FCA).
However, in August this year, Covid-19 put the kibosh on CMA’s funeral market investigation. Reports have indicated that due to the number of tragic deaths since March, there has been an unprecedented increase for the services of funeral providers. This in turn has made it incredibly difficult for CMA to carry out an appropriate investigation and retrieve the data they require from the funeral providers, crematoria operators and local authorities, with CMA saying that it has “significant ramifications for the design and implementation of price controls as a possible remedy”
