Practitioners — Lawyers · Last updated 26 May 2026 · methodology v2.1 · Hallucination Register

Scope exclusions — reinsurance, large-risk contracts, and group insurance distribution

RLB Citation ID: RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q018

AI's failure:Misstated Rule Risk for Lawyers:Regulatory enforcement / professional liability exposure

What the RLB Specialist Panel found

9. Scope exclusions — reinsurance, large-risk contracts, and group insurance distribution

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: The AI stated that the Consumer Duty can apply to group insurance distribution via the distribution chain where group policy beneficiaries are retail customers, characterising this as a situation where firms that manufacture or distribute policies with individual retail beneficiaries fall within scope if 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, or to activities connected to the distribution of group insurance policies or the extension of those policies to new members.
Why the AI went wrong: The AI directly reversed one of the regulation's explicit exclusions, asserting that group insurance distribution can fall within the Duty's scope in precisely the scenario the rules exclude. This is not a nuanced reading: PS22/9 specifically carves out activities connected to distributing group insurance policies and extending them to new members, and the AI's answer contradicts this unambiguously.
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 Lawyers in the United Kingdom advising on the Consumer Duty (PS22/9 + PRIN 2A)

Lawyers advising on Consumer Duty scope for insurance distribution, in particular the group insurance and large-risk commercial carve-outs in PRIN 2A.1.8R, are the population most exposed to the model's inverted answer. A scoping memo that brings group insurance distribution into the Duty's perimeter on the strength of a fabricated 'CP23/something' consultation paper is professionally indefensible and will be unwound by any specialist reader. PI exposure here is direct: the lawyer's advice imposes obligations on a client that the regulator has expressly excluded.

References — raw findings (per AI model)

RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q018-Opus47 Claude Opus 4.7 (web search on)

This finding also affects

Practitioner — Financial Advisers (GB) →

← Previous finding Differences between CP21/36 consultation and PS22/9 final rules Next finding → Which FCA Dear CEO letters remain in force after Consumer Duty implementation

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

Bluebook / OSCOLA (US + UK legal) Download

RegLeg Specialist Panel, Scope exclusions — reinsurance, large-risk contracts, and group insurance distribution [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/lawyers/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018/.

Plain text Download

RegLeg Specialist Panel (2026). "Scope exclusions — reinsurance, large-risk contracts, and group insurance distribution — Practitioners — Lawyers." 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/lawyers/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018/

APA 7th edition Download

RegLeg Specialist Panel. (2026). Scope exclusions — reinsurance, large-risk contracts, and group insurance distribution [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/lawyers/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     = {Scope exclusions — reinsurance, large-risk contracts, and group insurance distribution},
  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/lawyers/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-018/}
}

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