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Aipedia: Insurance brokers
The FCA regulates broker AI through existing rules, explained in its April 2024 AI Update and its October 2026 good practice page, with no new AI-specific requirements. Brokers need to know which publication says what, because supervisors and E&O insurers will judge AI governance against them.
Part of: AI in insurance brokers
In short
Four FCA documents matter: the AI Update (April 2024), which maps AI to existing rules; the "our approach" page (September 2025, updated October 2026), which rules out extra AI regulation; the good practice page (19 October 2026), which gives examples on Consumer Duty, SM&CR and operational resilience and says firms remain responsible for outsourced AI; and the 2024 AI survey. Alongside them sit the CII Digital Ethics Companion and the BIBA AI guide, which are professional and trade guidance rather than rules.
| Publication | Date | Status | Key point for brokers |
|---|---|---|---|
| FCA AI Update | 22 April 2024 | Explains how existing rules apply | Maps AI to the Principles, Consumer Duty, SYSC, SM&CR and DISP |
| AI and the FCA: our approach | 8 September 2025, updated 2 October 2026 | Policy statement of approach | No extra AI rules; Consumer Duty and SM&CR are the frameworks |
| AI in financial services: good practice and areas for improvement | 19 October 2026 | Illustrative examples, no new requirements | Outsourced AI remains the firm's responsibility; map AI to SMFs |
| CII Digital Ethics Companion | October 2021 | Supplementary guidance, not part of the Code of Ethics | Fairness from each customer's perspective; test data suppliers |
| BIBA AI guide | 2025 | Trade association guidance for members | Where AI fits in broking and the compliance considerations |
The AI Update was the FCA's response to the government's AI white paper. It takes each of the government's AI principles and shows which existing FCA rules already cover it. For a broker the relevant mapping includes Principles 2, 3, 6, 7, 8 and 9, the Consumer Duty in PRIN 2A including the good faith standard in PRIN 2A.2.2R, SYSC 4, 7 and 8 on governance, risk and outsourcing, SYSC 15A on operational resilience, FG16/5 on cloud outsourcing, SM&CR and DISP 1 on complaints.
Its fairness section refers to PS22/9 and FG22/5 on the Consumer Duty, UK GDPR Article 22 on automated decisions and the Equality Act 2010. That combination is directly relevant to brokers who use algorithmic pricing, eligibility rules or automated triage.
The AI and the FCA: our approach page, first published on 8 September 2025 and updated on 2 October 2026, says the FCA does not plan extra AI regulations. It treats the Consumer Duty and SM&CR as the frameworks that already govern AI use. In practice, a broker should not wait for an AI rulebook: the rules that apply to a manual process apply equally when AI performs or supports it.
The good practice page published on 19 October 2026 is the most practical of the FCA documents. It describes its examples as illustrative and says they do not create new requirements, and that firms remain responsible for consumer outcomes. Points most relevant to broking:
The 2024 Bank of England and FCA survey found 95% of insurance firms using AI. The FCA's AI Live Testing first cohort, announced in December 2025, included a home insurance business. The Mills Review (6 July 2026) made seven recommendations, including building foundations for "agentic finance". The Treasury Committee's report on AI in financial services (HC 684, 20 January 2026) was, according to published summaries, asking for practical FCA guidance on accountability by the end of 2026; responses were published on 16 April 2026. Further FCA guidance may follow.
The CII Digital Ethics Companion supplements the CII Code of Ethics. It is not part of the Code and is not described as mandatory, but a CII member who ignored it would find it hard to argue they had considered the ethics of a digital project. Its themes are practical: build ethics in from the start, ask "should" as well as "could", plan the explanations customers will need, and address discriminatory outcomes at each design stage and after launch.
The BIBA AI guide is available to members in full; this page does not summarise its detailed contents. BIBA's public release says AI is not "a panacea for serving customers". BIBA also announced an AI Academy in January 2026.
None of the FCA documents addresses broker PI directly. Good governance matters to E&O insurers because it reduces claims and supports a clear renewal presentation. See Consumer Duty for insurance brokers, does broker PI cover AI mistakes and the insurance broking AI hub.
For specific tasks, see broker chatbots and AI in claims notification. Apex arranges PI for insurance brokers and can review how your policy treats AI-assisted work.
It does not create new requirements. It gives illustrative examples of good and poor practice under existing rules, such as the Consumer Duty, SM&CR and SYSC 15A. Supervisors are likely to use it as a benchmark, so it is sensible to compare your AI governance against it.
The FCA expects AI responsibilities to be mapped to senior management functions and ownership assigned by use case. Senior managers need not be technical experts, but they must understand the risks in their area, obtain expertise where needed and keep auditable records of decisions.
No. It is supplementary guidance on applying the CII Code of Ethics to digital work and is not part of the Code. It is still useful evidence of what a professional broker would be expected to consider when introducing AI.
No verified FCA enforcement action, Ombudsman decision or court ruling about an insurance broker's use of AI has been found. The Ombudsman said in April 2026 that it had seen very few AI complaints so far.
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