Credit Unions
The question
To ask the Chancellor of the Exchequer, what discussions she has had with regulators on reviewing rules on credit unions offering insurance products such as income protection.
Answered by Lucy Rigby
Credit unions are regulated by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) to ensure the stability and soundness of the sector. The regulators are independent and make decisions on the regulation of credit unions in line with their statutory objectives.
Credit unions themselves are not insurance providers. Following the Financial Services and Markets Act 2023, credit unions were given clearer permissions to act as distributors, enabling their members to access insurance products through partner firms. This does not allow credit unions to underwrite insurance themselves, and any arrangements made under these rules would be subject to the regulators' consumer protection rules.
In response to a request from HM Treasury, the PRA and FCA published reports on the mutuals sector on 5 December. As part of this, the regulators have committed to reviewing the regulatory framework governing credit unions.
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