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Practitioners — Financial Advisers · Last updated 26 May 2026 · methodology v2.1 · Hallucination Register
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Consumer Duty scope exclusions — reinsurance, group insurance, and large commercial risks

RLB Citation ID: RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q018
AI's failure:Misstated Rule Risk for Financial Advisers:Regulatory enforcement / professional liability exposure
What the RLB Specialist Panel found

9. Consumer Duty scope exclusions — reinsurance, group insurance, and large commercial risks

  • Question (paraphrased to protect IP): Does the Consumer Duty apply to reinsurance companies, group insurance policy distribution, or large-risk commercial contracts?
  • Source regulation: Consumer Duty (PS22/9 + PRIN 2A), Financial Conduct Authority (Regulator portal: https://www.fca.org.uk)
  • What AI assistants typically say: AI tools state that the Consumer Duty can apply to group insurance distribution through the distribution chain where group policy beneficiaries are retail customers, and that firms manufacturing or distributing policies where individual retail beneficiaries are protected fall within scope where they materially influence retail outcomes.
  • What the regulator actually says: The Consumer Duty does not apply to reinsurance, contracts of large risk sold to commercial customers where the 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.
  • Why the AI went wrong: The AI's answer on group insurance is a direct contradiction of the rule as written. PS22/9 explicitly excludes activities connected to the distribution of group insurance policies and the extension of those policies to new members — the AI instead asserted that such distribution can fall within scope where retail beneficiaries are involved. A Financial Adviser advising a firm that distributes group insurance policies would receive completely wrong guidance about their Consumer Duty obligations.
  • Cited source(s):
  • https://handbook.fca.org.uk/handbook/PRIN/2A/1.html — Pretextual
  • https://www.fca.org.uk/publication/finalised-guidance/fg22-5.pdf — Pretextual
Impact for Financial Advisers in the United Kingdom advising on the Consumer Duty (PS22/9 + PRIN 2A)

Financial advisers in the insurance distribution chain need accurate Consumer Duty scope decisions. The model's reversal of the group insurance carve-out can pull excluded activities into a Duty-compliant programme, which both inflates cost and dilutes attention from the activities that are within scope. An insurance-product adviser working off the AI's answer will misallocate review resources across the product portfolio.

References — raw findings (per AI model)
This finding also affects
← Previous finding Differences between the Consumer Duty consultation draft (CP21/36) and the final rules (PS22/9) Next finding → Which pre-Consumer Duty Dear CEO letters remain live supervisory expectations?
Cite this finding

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.

RLB Citation ID: RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q018
Plain text Download 
RegLeg Specialist Panel (2026). "Consumer Duty scope exclusions — reinsurance, group insurance, and large commercial risks — Practitioners — Financial Advisers." Citation ID: RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q018. RegLegBrief AI Hallucination Research, published 2026-05-26. https://reglegbrief.com/regulators/j3/gb/FCA/CONSUMER-DUTY-PS22-9/practitioners/financial-advisers/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018/
APA 7th edition Download 
RegLeg Specialist Panel. (2026). Consumer Duty scope exclusions — reinsurance, group insurance, and large commercial risks [Hallucination finding RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q018]. RegLegBrief AI Hallucination Research. https://reglegbrief.com/regulators/j3/gb/FCA/CONSUMER-DUTY-PS22-9/practitioners/financial-advisers/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018/
Bluebook / OSCOLA (US + UK legal) Download 
RegLeg Specialist Panel, Consumer Duty scope exclusions — reinsurance, group insurance, and large commercial risks [RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q018], RegLegBrief AI Hallucination Research (May 26, 2026), https://reglegbrief.com/regulators/j3/gb/FCA/CONSUMER-DUTY-PS22-9/practitioners/financial-advisers/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018/.
BibTeX Download 
@misc{reglegbrief_RLB_F_GB_FCA_CONSUMER_DUTY_PS22_9_Q018,
  author    = {RegLeg Specialist Panel},
  title     = {Consumer Duty scope exclusions — reinsurance, group insurance, and large commercial risks},
  year      = {2026},
  publisher = {RegLegBrief AI Hallucination Research},
  note      = {Hallucination finding Citation ID: RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q018},
  url       = {https://reglegbrief.com/regulators/j3/gb/FCA/CONSUMER-DUTY-PS22-9/practitioners/financial-advisers/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018/}
}
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