---
type: "AIHallucinationFinding"
title: "Does the Consumer Duty apply to reinsurance, group insurance policy distribution, and large-risk…"
citation_id: "RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q018-Opus47"
finding_uid: "GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018--opus-47-websearch"
question_uid: "GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018"
regulation_id: "GB-FCA-GB-001-CONSUMER-DUTY-PS22-9"
regulation_slug: "CONSUMER-DUTY-PS22-9"
regulation_title: "Consumer Duty (PS22/9 + PRIN 2A), Financial Conduct Authority"
regulator_short_code: "FCA"
regulatory_body_id: "FCA-GB-001"
jurisdiction_code: "GB"
j_level: "J3"
ai_subject: "claude-opus-4-7"
ai_subject_display: "Claude Opus 4.7 (web search on)"
ai_subject_version: "opus-47-websearch"
response_failure_mode: "misstated_rule"
substrate_document_name: "R3-GUIDELINE-Q17_consumer_duty_focus_areas.pdf"
substrate_document_path: "https://reglegbrief.com/substrate/GB/FCA/CONSUMER-DUTY-PS22-9/_raw_manual_substrate/R3-GUIDELINE-Q17_consumer_duty_focus_areas.pdf"
substrate_section_anchor: "Scope: Consumer Duty does NOT apply to reinsurance / large risk contracts / group insurance distribution"
citation_issue_types: ["Pretextual"]
audiences: ["ai_labs", "practitioners", "sector_dept"]
published_at: "2026-05-28T07:44:51.465735+00:00"
substrate_version: 1
methodology_version: "2.1"
license: "CC-BY-4.0"
resource: "https://reglegbrief.com/regulators/j3/gb/fca/CONSUMER-DUTY-PS22-9/ai-labs/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018--opus-47-websearch/"
tags: ["ai-hallucination", "misstated_rule", "fca", "consumer-duty-ps22-9", "gb"]
timestamp: "2026-06-16T00:00:00+00:00"
---

# AI Hallucination Finding: Does the Consumer Duty apply to reinsurance, group insurance policy distribution, and large-risk…

- **Citation ID.** `RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q018-Opus47`
- **Finding UID.** `GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018--opus-47-websearch`
- **Regulation.** [`CONSUMER-DUTY-PS22-9`](/okf/regulations/CONSUMER-DUTY-PS22-9.md) — Consumer Duty (PS22/9 + PRIN 2A), Financial Conduct Authority
- **Regulator.** [`FCA-GB-001`](/okf/bodies/FCA-GB-001.md) — Financial Conduct Authority
- **AI subject.** Claude Opus 4.7 (web search on)
- **Failure mode.** [`misstated_rule`](/okf/taxonomy/failure-modes.md)
- **Published.** 2026-05-28T07:44:51.465735+00:00

## Question put to the AI subject

Does the Consumer Duty apply to reinsurance, group insurance policy distribution, and large-risk commercial contracts?

## AI subject's verbatim answer

Group insurance: the Duty can apply via the distribution chain when group policy beneficiaries are retail customers; the FCA addressed this in further consultation (CP23/something on group insurance practices) and confirmed that firms manufacturing/distributing policies where individual retail beneficiaries are protected fall within scope.

## Verbatim regulator text contradicting the answer

> Consumer Duty does not apply to reinsurance, contracts of large risk sold to commercial customers where risk is located outside the UK, nor to activities connected to the distribution of group insurance policies or the extension of these policies to new members.

_Source:_ [R3-GUIDELINE-Q17_consumer_duty_focus_areas.pdf](https://reglegbrief.com/substrate/GB/FCA/CONSUMER-DUTY-PS22-9/_raw_manual_substrate/R3-GUIDELINE-Q17_consumer_duty_focus_areas.pdf)
_Section anchor:_ Scope: Consumer Duty does NOT apply to reinsurance / large risk contracts / group insurance distribution

## Failure mode

**`misstated_rule`** — Misstated rule — the AI gave a definite rule, threshold, or obligation that the regulator's verbatim text does not support.

## Citation-issue types

- **Pretextual** — <https://handbook.fca.org.uk/handbook/PRIN/2A/1.html>
- **Pretextual** — <https://www.fca.org.uk/publication/finalised-guidance/fg22-5.pdf>
- **Pretextual** — <https://www.fca.org.uk/publication/policy/ps22-9.pdf>

## Related concepts

- Regulation: [CONSUMER-DUTY-PS22-9](/okf/regulations/CONSUMER-DUTY-PS22-9.md)
- Regulator: [FCA-GB-001](/okf/bodies/FCA-GB-001.md)
- Failure-mode taxonomy: [misstated_rule](/okf/taxonomy/failure-modes.md)
- Methodology: [v2.3](/okf/methodology.md)
- Editorial standards: [right of reply](/okf/editorial-standards.md)

## Reproduction

Citation ID: `RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q018-Opus47`

Resource URL (HTML view of this finding):

<https://reglegbrief.com/regulators/j3/gb/fca/CONSUMER-DUTY-PS22-9/ai-labs/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018--opus-47-websearch/>

This finding is reproducible against the substrate document linked above, using the same AI subject, the same methodology version, and the verbatim question text.