AI subject tested: Claude Opus 4.7 (web search on)
Question (paraphrased): Does the Consumer Duty apply to reinsurance, group insurance policy distribution, and large-risk commercial contracts?
AI response:
"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."
Regulator verbatim text:
"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."
Failure mode: misstated_rule
Substrate document: R3-GUIDELINE-Q17_consumer_duty_focus_areas.pdf
This finding documents a confirmed hallucination by Claude Opus 4.7 (web search on) on a probe of the regulation. The model's response was tested against the regulator's verbatim primary text and classified as misstated_rule. Full per-finding context is available via the linked Citation ID.
Each finding has a stable Citation ID (RLB-F-… for aggregated case-study findings, RLB-H-… for raw per-model hallucinations) — like a DOI, the ID always resolves to the canonical finding even if URLs change.
RegLeg Specialist Panel (2026). "Does the Consumer Duty apply to reinsurance, group insurance policy distribution, and large-risk commercial contracts? — AI Labs." Citation ID: RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q018-Opus47. RegLegBrief AI Hallucination Research, published 2026-06-07. https://reglegbrief.com/regulators/j3/GB/FCA/CONSUMER-DUTY-PS22-9/whitepaper/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018--opus-47-websearch/
RegLeg Specialist Panel. (2026). Does the Consumer Duty apply to reinsurance, group insurance policy distribution, and large-risk commercial contracts? [Hallucination finding RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q018-Opus47]. RegLegBrief AI Hallucination Research. https://reglegbrief.com/regulators/j3/GB/FCA/CONSUMER-DUTY-PS22-9/whitepaper/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018--opus-47-websearch/
RegLeg Specialist Panel, Does the Consumer Duty apply to reinsurance, group insurance policy distribution, and large-risk commercial contracts? [RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q018-Opus47], RegLegBrief AI Hallucination Research (June 07, 2026), https://reglegbrief.com/regulators/j3/GB/FCA/CONSUMER-DUTY-PS22-9/whitepaper/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018--opus-47-websearch/.
@misc{reglegbrief_RLB_H_GB_FCA_CONSUMER_DUTY_PS22_9_Q018_Opus47,
author = {RegLeg Specialist Panel},
title = {Does the Consumer Duty apply to reinsurance, group insurance policy distribution, and large-risk commercial contracts?},
year = {2026},
publisher = {RegLegBrief AI Hallucination Research},
note = {Hallucination finding Citation ID: RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q018-Opus47},
url = {https://reglegbrief.com/regulators/j3/GB/FCA/CONSUMER-DUTY-PS22-9/whitepaper/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018--opus-47-websearch/}
}
Every finding on this page compares an AI subject's account of the rule against the regulator's verbatim text from the regulator's own portal. Both are linked. Each delta, its root causes, and impact analysis are documented and published with immutable Citation IDs.