Category: Compliance & AML · Reviewed by Al Jabbar, Broker · Specialist Risks · Last reviewed June 2026
The FCA Handbook sourcebook governing the segregation, holding and protection of client money and client assets — including CASS 5 for insurance broker client money.
CASS is the Client Assets sourcebook. It sets the framework for safeguarding money and investment assets that belong to clients. For an insurance broker, the relevant chapter is normally CASS 5, which sets the rules for receiving, holding, segregating and paying away insurance premium and claims money.
Made under FSMA sections 137A, 137B (client money rules) and 138, drawing on UK retained MiFID II for investment business client assets and on the Insurance Distribution Directive for insurance intermediary client money. CASS 5 implements the IDD requirement (Article 10(6)) that intermediaries protect customers’ funds.
CASS 5 offers two principal regimes: (a) statutory trust client money — funds held in a designated client account on trust for clients, subject to a daily reconciliation and proper bank acknowledgement letter; and (b) non-statutory trust client money — broader rules permitting advances of credit, requiring an external audit-prepared trust deed. CASS 5.5 addresses risk transfer arrangements with insurers, where premium and claims monies are deemed received by the insurer at the broker, removing them from CASS 5 client money status. Daily / weekly reconciliations, signed bank letters acknowledging trust status, segregated accounts and proper bookkeeping are central.
Many UK general insurance brokers operate under risk transfer agreements with most or all of their insurers, which can substantially reduce the CASS 5 client money perimeter. A formal Terms of Business Agreement (TOBA) with each insurer is required. CASS 7 governs MiFID client money (rare for pure brokers); CASS 6 governs custody assets.
A typical broker receives a customer’s renewal premium of £2,400. If risk transfer applies for that insurer, the £2,400 is the insurer’s money from the moment of receipt and sits outside CASS 5. Where risk transfer does not apply, the £2,400 enters the statutory trust client account, the firm performs the daily reconciliation, and the funds are paid to the insurer in accordance with the credit period agreed.
FCA Handbook, Client Assets sourcebook (CASS). Financial Services and Markets Act 2000, sections 137A, 137B, 138. UK retained Insurance Distribution Directive (Directive (EU) 2016/97), Article 10(6).
By Matt Bartlett, Director, on 2026-06-11.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-11. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.
Apex Insurance Brokers serves UK professional services firms and commercial businesses. Call 0117 325 0027, email hello@apexinsurancebrokers.co.uk, or request a quotation.
Get a quote