ECCTA: What UK Insurers Need to Know and Do Now
Sep 18, 2025
The Economic Crime and Corporate Transparency Act (ECCTA) is no longer a future concern — it is live law. In force since 2023, it is already reshaping corporate responsibility and enforcement across the United Kingdom. The Act introduces stricter transparency rules, expands the powers of Companies House, and creates new corporate offences. The most notable is the corporate “Failure to Prevent Fraud” regime that took effect on 1 September 2025.
For insurers in England and Wales, the implications go well beyond customer risk. The law affects every part of the business, influencing underwriting, claims handling, compliance programs, and D&O exposure. The challenge now is proving adherence, monitoring evolving enforcement, and adapting to case law in real time.
This post will:
Explain the new criminal law in practical terms.
Highlight the main effects on insurance.
Give insurers clear steps to demonstrate compliance, reduce risk, stay ahead of regulators, and uncover opportunity.
What the ECCTA Does and Why It Matters
The ECCTA has three clear goals:
Make it harder for criminals to hide behind complex corporate structures.
Strengthen enforcement powers.
Hold companies to higher standards of accountability.
The Act updates company registration rules, improves transparency around ownership, and gives investigators stronger tools to tackle economic crime. It also changes corporate criminal liability, making it easier to hold corporate entities responsible for offences committed by people connected to them.
A major change is the new “Failure to Prevent Fraud” offence. Implemented on 1 September 2025, prosecutors have already begun enforcing this provision. Prosecutors can charge a company that benefits from fraud unless it proves it had strong fraud controls in place. This even includes if no evidence exists against senior managers being directly involved.
For insurers, regulators expect to see evidence that fraud-prevention frameworks are not only documented but operational, tested, and continually updated to stop fraud.
Why Insurers Should Pay Attention
Insurance sits at the centre of risk transfer, customer trust, and regulation. The ECCTA is already shaping risk assessments, enforcement expectations, and liability exposure in several ways:
Underwriting Risk & Appetite. As companies face tougher transparency requirements and higher criminal exposure, insurers must reconsider how they price and underwrite high risks linked to corporate governance, AML controls, and fraud frameworks.
Claims & Fraud Investigations. Insurers investigating suspicious claims must now factor in the possibility of parallel criminal inquiries. This raises the stakes for claims handling, speeds up timelines, and makes strong evidence preservation critical.
D&O and Financial Lines Exposure. Board members and officers face higher personal and corporate exposure. D&O insurers must revisit coverage triggers, exclusions, and claims handling to ensure they reflect the enforcement landscape already unfolding.
Customer & Counterparty Due Diligence. With ownership transparency under closer scrutiny, insurers are expected to strengthen KYC, onboarding, and monitoring across all stakeholders, including clients, partners, and investors. Functions that are all core to underwriting commercial and specialty lines.
Insurers’ Own Exposure Under ECCTA
The law doesn’t just apply to clients. It directly exposes the insurers themselves. Enforcement will not overlook internal weaknesses. Key risks include:
Insider Fraud and Collusion. Employees or agents working with claimants, brokers, or suppliers can put insurers at risk. This happens if whistleblowing and audit controls are weak.
Supply Chain Oversight. Adjusters, repair shops, and other third parties are part of the insurer’s ecosystem. A failure to oversee them could be seen as condoning fraud.
Criminal Exploitation of Insurance. Organised crime groups use fraudulent policies or staged claims to launder money or fund other criminal activity. Regulators will view systemic blind spots as governance failures.
Insurers must demonstrate they are applying the same level of scrutiny to their own operations as they expect from their clients.
Practical Steps Insurers Must Demonstrate Now
Compliance is no longer about “getting ready”. It’s about proving you already have effective controls in place and continuously refining them as enforcement matures. Six high-impact actions include:
1. Reassess your underwriting questionnaires and risk scoring.
Questions must clarify beneficial ownership, board-level fraud prevention controls, internal audit frequency, whistleblowing systems, and third-party oversight. Regulators will expect evidence, not promises. Where possible, ask for objective proof such as policy documents, meeting minutes, or test results.
2. Strengthen claims triage and evidence retention.
Insurers must treat potential ECCTA-related matters as higher-priority investigations. If a claim shows a critical problem, keep records safe right away. Strengthen the chain of custody and get legal help early. This ensures that the processes hold up under regulatory checks.
3. Align fraud prevention expectations with government guidance.
UK guidance emphasises leadership commitment, risk assessment, proportionate procedures, due diligence, training, and ongoing monitoring. Insurers should be mapping and documenting their own controls and requiring the same from clients.
4. Re-evaluate D&O and financial lines wordings.
Policy terms must reflect the fact that ECCTA liabilities are live. Work with brokers and legal counsel to stress-test policy language against the new corporate liabilities. Review policy terms (limits, retentions, exclusions) to ensure they align with current and future enforcement.
5. Upgrade onboarding & ongoing KYC for corporate customers.
Verification of beneficial ownership and company structure through Companies House and internal control checks should already be standard practice. If not make beneficial-owner evidence mandatory for complex or cross-border risks. Where gaps exist, enhanced due diligence or outright declinature may be necessary.
6. Offer an early-warning controls checklist for insureds.
Provide clients with an “ECCTA readiness” checklist. Include items like a current ownership register, documented anti-fraud framework, senior oversight, and independent testing. This a demonstrates proactive value and strengthens the insurer’s own defence.
Enforcement, Penalties and the Shifting Landscape
Companies House has stronger powers now. It can impose new penalties for false or missing filings.
It also has the authority to challenge suspicious companies. Companies and boards of directors that mislead regulators or do not meet their duties can face fines and legal trouble. The ECCTA’s enforcement design makes compliance failures more costly and more visible.
The “Failure to Prevent Fraud” corporate offence fundamentally changes prosecution. Courts no longer need to prove senior-manager involvement, only that the company failed to demonstrate adequate procedures. Enforcement will focus on governance gaps and compliance failures rather than just the underlying criminal act itself.
Real-World Scenarios Already Emerging
Underwriting: A multinational client reveals aggressive sales incentives and weak whistleblowing protections. The insurer must now assess not only claims risk but also corporate fraud-control maturity. They may adjust pricing or set conditions precedent to coverage.
Claims: A complex liability claim reveals a pattern of falsified documents across multiple jurisdictions. Prosecutors open parallel inquiries under ECCTA. They must preserve evidence, prepare for information requests, and coordinate civil recovery with potential criminal proceedings.
D&O exposure: Directors face civil and criminal probes for oversight failures. D&O insurers see higher demand for clarity on policy triggers and are likely to face more complex, high-cost claims.
Opportunities for Insurers
ECCTA enforcement also creates opportunity. Insurers that show regulators they are proactive will stand out. They can do this by offering readiness reviews, better KYC tools, or special investigative services. They can also turn compliance into a competitive advantage, supporting clients with fraud-prevention programs and risk-based pricing.
A Few Implementation Guardrails
Don’t over-rely on registries. Companies House is stronger but not foolproof. Use it as one layer in a wider due-diligence process.
Document everything. Records of training, testing, and corrective actions will be critical in proving “reasonable procedures.”
Coordinate with legal early. Enforcement means regulators expect legal and compliance teams to embed themselves in underwriting and claims strategies.
Monitor, Prove, and Adapt
The ECCTA is already raising the corporate bar shaping enforcement, liability, and corporate accountability. Insurers should have controls in place. Updated underwriting, tightened KYC and claims processes, adjusted D&O strategies, and assisted clients in closing governance gaps. The key takeaway is that companies must prove their effectiveness, monitor adherence, and adapt to regulatory developments.
Those who demonstrate compliance today will not only reduce exposure but also strengthen customer trust and regulatory confidence. In a landscape where enforcement is already underway, insurers that lead will define best practice for the industry.