FCA publishes a CP on rules changes for Key Information Documents

The FCA have published CP16/18 which gives the suggested changes to the rulebook to allow for the requirement to produce a Key Information Document for all sales from 1/1/17.

Although the FCA acknowledges Brexit, it states that whilst the UK is a member of the EU, all providers and advisers need to comply with the requirement for a Key Information Document for any packaged retail investment product. It confirms that this includes unit linked and with-profit insurances including Holloway insurances. The FCA then removes the requirement for Key Features Documents for any product for which a Key Information Document applies and allows insurers to include Solvency II disclosure information within the KID rather than having to be separate.

We will be putting up a full analysis soon, however, there is one oddity we notice immediately. The KID projections and cost calculations are generic for £1000 per annum and £10000 single premium. The FCA are allowing normal projections to be produced which will use different investment returns than underlying the KID projections. This could, obviously, cause confusion.