What's Happening?
RSA has issued a warning to nearly 25,000 UK businesses about the potential for criminal liability under the new Failure to Prevent Fraud (FTPF) legislation. Effective September 1, 2025, this law mandates organizations to implement robust fraud prevention measures. The legislation, part of the Economic Crime and Corporate Transparency Act 2023, applies to companies meeting specific criteria, such as having over 250 employees or significant financial metrics. RSA is providing guidance and resources to help businesses assess and strengthen their fraud prevention procedures. The insurer is also collaborating with brokers to support clients during this transition.
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Why It's Important?
The introduction of the FTPF legislation represents a significant shift in corporate accountability, emphasizing the need for businesses to proactively prevent fraud. This law could have substantial implications for companies, particularly those lacking strong internal controls. Organizations failing to comply may face prosecution, highlighting the importance of understanding and managing this risk. RSA's initiative to support businesses underscores the critical role of the insurance industry in helping clients navigate complex regulatory landscapes. The legislation aims to reduce fraud by embedding stronger controls, potentially leading to a more transparent and secure business environment.
What's Next?
As the FTPF legislation comes into effect, businesses will need to review and enhance their anti-fraud measures to avoid legal repercussions. RSA's collaboration with brokers will be crucial in educating clients about the new requirements and assisting them in implementing necessary changes. Companies may face increased scrutiny from regulators, prompting a reevaluation of their risk management strategies. The insurance industry is likely to play a pivotal role in facilitating this transition, offering expertise and resources to ensure compliance and mitigate potential liabilities.
