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Industry Guide

Section 250 Compliance for Insurance Brokers

Insurance brokers authorised by the FCA have SM&CR obligations for their approved persons, but Section 250 of the Crime and Policing Act 2026 extends beyond the existing register. Senior underwriters, lines-of-business heads, and managing directors of coverholders who are not SMF-approved may fall squarely within Section 250's scope. Now the provision is in force, a systematic gap analysis is urgent.

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TL;DR

Insurance Brokers face Section 250 obligations under the Crime and Policing Act 2026. Insurance brokers authorised by the FCA have SM&CR obligations for their approved persons, but Section 250 of the Crime and Policing Act 2026 extends beyond the existing register. Senior underwriters, lines-of-business heads, and managing directors of coverholders who are not SMF-approved may fall squarely within Section 250's scope. Now the provision is in force, a systematic gap analysis is urgent. Typical Section 250 gap: Uncovered principals in a mid-size broker. Key roles in scope: Senior underwriters, Coverholder principals, MGA directors. Deadline: June 29, 2026. CoverProof automates the SM&CR gap analysis, declarations, and PDF/A-3B board evidence pack generation for insurance brokerage firms.

5–25

Uncovered principals in a mid-size broker

The typical Section 250 gap for a insurance brokerage firm — roles with significant financial authority that may sit outside SM&CR approval and need governance declarations now the law is in force.

Why insurance brokers cannot rely on existing SM&CR registers alone

Coverholder and delegated authority principals

Principals at Lloyd's coverholders or firms with binding authority who are not individually FCA-approved represent a classic Section 250 gap. Their authority to bind risk on behalf of an insurer constitutes significant financial influence.

Senior underwriters and risk heads

An underwriter who sets pricing strategy, manages a book of business, and approves non-standard terms is exercising significant financial authority — regardless of whether they hold a formal SMF.

MGA leadership

Managing General Agents often have complex ownership structures. Senior leaders at MGA firms need a clear Section 250 analysis that maps their actual authority to the legislation.

Roles typically in scope for insurance brokerage firms

  • ⚑Senior underwriters
  • ⚑Coverholder principals
  • ⚑MGA directors
  • ⚑Lines-of-business heads
  • ⚑Managing directors without SMF designation

Common questions from insurance brokerage compliance teams

Does Lloyd's membership change our Section 250 obligations?

No. Lloyd's managing agents and coverholders are FCA-regulated and have the same Section 250 obligations as any other authorised firm. Lloyd's own compliance framework does not substitute for the statutory requirement.

We are a small regional broker with 12 staff. Do we have a Section 250 obligation?

Yes, if you are FCA-authorised and have individuals in significant roles outside your SM&CR perimeter. Size is not an exemption. CoverProof Professional (£299/month) is the entry tier for FCA-regulated firms managing their first Section 250 cycle and ongoing obligations beyond it.

Do not leave your Section 250 gap undocumented.

CoverProof identifies every role in your brokerage that needs a Section 250 governance declaration. Zero-login declaration flow means recipients can respond without creating an account. Evidence pack generated automatically.

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