Buildings insurance renewal: what the broker must tell your block, and what to ask
Since 31 December 2023 FCA rules have required insurers and brokers to give the policyholder, for passing to every leaseholder, the premium per building, all commission in pounds and how many quotes were sought. Here is the checklist for a self-managed block's next renewal.
What happened
This is a guide to rules that have been in force for nearly three years, written because many small blocks renew in the new year and the next set of changes is on its way.
The Financial Conduct Authority’s rules for multi-occupancy buildings insurance came into force on 31 December 2023 (policy statement PS23/14). They followed an FCA review that found commission of up to 62% being paid to brokers in some cases, often shared on with freeholders and managing agents. The rules make insurers and brokers treat leaseholders as customers when designing and selling these policies, ban recommending a policy because of the commission it pays, and require clear information for leaseholders.
In July 2026 the government’s response to its consultation on service charge transparency in England said it will go further: landlords and managing agents will have to disclose their connections and payments from brokers and insurers, and leaseholders will get more information on how quotes were obtained and how the reinstatement cost was set. It also said it will introduce “a transparent and fair permitted building insurance payment”. These measures need regulations and are not yet in force.
What the broker must give the company at every renewal
Under the FCA’s rules in ICOBS 6A.7, as soon as reasonably practicable after the policy is taken out or renewed, the firm must give the policyholder, and tell it to pass on in full to every leaseholder:
- a summary of the cover;
- the price: the total premium, the insurance premium tax and any VAT, and a breakdown of the premium for the building (and for each flat, where the policy says so);
- all remuneration in pounds: the commission the broker and its associates receive, and any payment or incentive given to anyone else, including the freeholder or anyone acting for it, such as a managing agent, where that sum ends up in what leaseholders pay;
- for a broker, how the market was tested: how many quotes it obtained from the chosen insurer and from other insurers, and why the policy chosen suits both the company and the leaseholders. A customer or leaseholder can ask for more detail about those quotes;
- for a broker, any conflicts of interest.
What it means for your building
In a block run by its own leaseholders, the company is both the policyholder and the people paying. That makes the disclosure simple to use: the board should read it, check the figures, and send it to every flat with the service charge budget.
A worked example: a 20-flat block pays £18,000 a year including insurance premium tax. If the disclosure shows broker commission of 20% of the net premium, that is roughly £3,200, or about £160 a flat. The board can ask whether a fee-based broker, or a lower commission, would give the same service for less. The figures here are illustrative; use your own disclosure.
What to ask at your next renewal
- Ask the broker for the ICOBS 6A.7 disclosure in writing, with commission in pounds, before you agree to renew.
- Ask how many insurers were approached and why the others were turned down.
- Check the reinstatement (rebuild) value, and when it was last professionally assessed. Under-insurance can reduce a claim.
- Tell the insurer about anything material: cladding, rooftop solar panels, commercial units, vacant flats and any short lets.
- Confirm no one connected to the company, its directors or any managing agent receives any share of the commission. If anyone does, disclose it to leaseholders and minute it.
- Send the disclosure to every leaseholder within days of renewal.
This is general information, not legal or insurance advice. Speak to an FCA-regulated broker about your own policy.
How Freeholdpilot helps
Freeholdpilot keeps the policy schedule and the broker’s disclosure in the building’s document store, reminds the board before the renewal date, and records the board’s renewal decision, so every leaseholder can see what was paid and why. Our buildings insurance guide covers what cover to buy.
Questions
Do these rules apply if our own company buys the insurance?
Yes. The rules are on the insurer and the broker, not on the type of landlord. Your company is the customer, and the broker must tell it to pass the information to every leaseholder promptly and in full.
Is commission banned?
No. The FCA did not cap or ban commission. It requires commission to be disclosed in pounds and requires policies to give fair value, and it said brokers should stop paying commission on to freeholders and managing agents unless they can justify it. The government has said it will introduce a "permitted building insurance payment" in England, but that is not in force yet.
Do these rules apply across the UK?
The FCA rules apply to regulated insurers and brokers across the UK. The government's planned extra disclosure duties for landlords and managing agents are for England only and are not in force.
The broker hasn't sent anything. What can a leaseholder do?
Ask the company first. If the broker knows a leaseholder has not received the information, the FCA rules say the broker must give it to them directly.
Sources
- FCA: PS23/14 Multi-occupancy buildings insurance, feedback to CP23/8 and final rules (rules in force 31 December 2023)
- FCA: FCA confirms leasehold buildings insurance reforms (press release, 29 September 2023)
- MHCLG: Government response to the strengthening leaseholder protections over charges and services consultation (July 2026)
This is general information about the law in England and Wales unless it says otherwise, not legal advice for your building. For advice, speak to a solicitor or ask us to introduce one of our partner firms. How we write the news · Report a mistake
