Section 39 of the Financial Services and Markets Act 2000 exempts an AR from needing its own authorisation for the regulated business its principal has accepted responsibility for in writing. The principal is responsible for anything the AR does or fails to do in that business, as if it had expressly allowed it.

Full and introducer ARs

• Full AR. The FCA Handbook lists the activities an AR can be exempt for. They include arranging and advising on general insurance, the category that covers travel insurance.

• Introducer AR (IAR). An IAR’s appointment must be limited to introducing customers to the principal or its group and handing out non-real-time financial promotions. It cannot arrange insurance or help administer a policy.

The principal’s duties

The FCA says a principal must:

• have a written AR agreement

• check before appointing an AR that it is fit and proper and financially stable

• notify the FCA at least 30 days before an appointment takes effect

• review each AR at least every 12 months

• make sure its ARs meet standards such as the Consumer Duty.

The FCA strengthened these rules in policy statement PS22/11, whose changes took effect on 8 December 2022. It brought in the 30-day notice, annual reviews, a yearly self-assessment signed off by the principal’s governing body and more reporting on ARs.

HM Treasury consulted from 12 February to 9 April 2026 on changing the law, including a new FCA permission that firms would need before acting as a principal. These are proposals, not law. For how ARs fit into selling cover, see how to sell travel insurance.