Category: Compliance & AML · Reviewed by Al Jabbar, Broker · Specialist Risks · Last reviewed June 2026
The FCA’s published framework for how it supervises firms — forward-looking, judgement-based, and proportionate — implemented through the Approach to Supervision document and the categorisation of firms into Fixed and Flexible portfolios.
The FCA’s supervision approach is set out in its periodically published “Approach to Supervision” document and operationalised through portfolio segmentation. Firms are placed in the Fixed Portfolio (continuous dedicated supervisory relationship — typically the largest or highest-risk firms) or the Flexible Portfolio (proactive thematic supervision and reactive engagement). Either way, the supervision philosophy is forward-looking, judgement-based and proportionate to the harm a firm can cause.
FCA statutory operational objectives under FSMA section 1B (the strategic objective and three operational objectives — consumer protection, market integrity, competition). The Approach to Supervision is non-binding but explains how the FCA exercises its statutory powers under Parts X, XI and XIV of FSMA.
A Flexible Portfolio firm typically interacts with the FCA through thematic reviews, FCA portfolio letters, surveys, market studies, periodic reporting (RMAR, REP-CRIM, etc.), and reactive engagement when notifications are made or issues arise. Fixed Portfolio firms additionally have a named supervisory team and regular structured interactions. Supervisory interventions can include section 166 skilled persons reviews, requirements (VREQ / OIREQ), variation of permission, and ultimately enforcement.
The FCA’s Insurance Brokers portfolio is currently a Flexible Portfolio. Periodic FCA portfolio letters set out FCA expectations for the sector — most recently emphasising Consumer Duty, fair value, vulnerable customers, AR oversight (post-PS22/11), and operational resilience.
Apex receives, like other insurance brokers, the FCA’s periodic Dear CEO portfolio letter setting out priorities for the sector. The board considers the letter, maps expectations to existing controls, and documents any gap-closure work in board minutes. RMAR returns are filed twice yearly per SUP 16.12.
FCA Approach to Supervision (current edition). Financial Services and Markets Act 2000, sections 1B, 137A, Part X, Part XI, Part XIV. FCA Handbook, SUP.
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.
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