Does InsuranceFX ever hold our money or our clients' money?
No. InsuranceFX never holds, receives or routes money at any step, and never sends or changes payment details.
Your firm contracts directly with the provider you choose. Money moves only between your firm's own accounts, the provider and the beneficiaries you instruct. InsuranceFX is not a party to any account, has no access to one and cannot move, hold or redirect money. We never ask anyone to send money to us.
- We never hold client money or any other money.
- We never receive premiums, claims money or settlement funds, even briefly.
- We never make payments, execute conversions or instruct a provider on your behalf.
- We never send, confirm or change payment details for anyone.
- We never give a view on whether an arrangement fits your firm's client money position.
- We never collect your KYC documents. The provider collects what it needs directly from you.
Does it matter for FX whether we hold premiums as client money or under risk transfer?
Yes. It decides whose money is being converted, which rules apply to it and which questions your compliance officer has to answer before a new provider is used.
Under a risk transfer agreement an intermediary receives premiums as agent of the insurer, and the money is generally treated as already received by the insurer. Where there is no risk transfer, premiums and claims money held by an intermediary are generally client money, held on trust for its clients under CASS 5. Many firms have both: risk transfer with some insurers and classes, client money for the rest. A risk transfer agreement may cover premiums but not claims or return premiums, so check what each one covers.
| Point | Risk transfer | Client money on a statutory trust | Client money on a non-statutory trust |
|---|---|---|---|
| Where CASS 5 deals with it | CASS 5.2, holding money as agent of an insurance undertaking | CASS 5.3, statutory trust | CASS 5.4, non-statutory trust |
| In outline | The intermediary holds the money as agent of the insurer under a written agreement | The money is held on a trust created by the rules for the benefit of clients | The money is held on a trust the firm sets up by deed, with extra conditions in the rules |
| What it means for a conversion | Generally the insurer's money in your hands. The agreement and the insurer's own requirements may say where and in which currency it is held | Client money. CASS 5 generally requires it to be held in a client bank account at an approved bank | Client money. CASS 5 generally requires it to be held in a client bank account at an approved bank, and the trust deed adds its own terms |
| Question for your compliance officer | Does the agreement cover this insurer, this class and this flow, including claims money? | Does converting this money, and where it sits while it is converted, fit our CASS 5 position? | Does our trust deed say anything about currency or conversion, and does the conversion fit our CASS 5 position? |
A plain-language outline, not a statement of the rules. Read CASS 5 itself and take advice on how it applies to your firm.
Your firm's own money is different again. Commission and brokerage that you are entitled to and have properly taken out of the client account are generally your firm's money, and converting them does not raise the same questions. That is one reason some firms start a new provider on their own money first.
Where does the money sit at each step of a conversion?
In one of three places: a client bank account at an approved bank, an account with the FX provider, or the account of the person you are paying. Never with InsuranceFX.
| Place | What it is | What protects the money | What to ask |
|---|---|---|---|
| Client bank account at an approved bank | The account CASS 5 generally requires client money to be held in, set up and designated as a client account | The client money rules and the trust. The money is a deposit with the bank | Which currencies can we hold here, and which flows must start and finish here? |
| Account with an FX provider that is a payment or e-money institution | An account in your firm's name holding funds you send the provider to convert and pay | Safeguarding under the provider's FCA authorisation. Not FSCS deposit protection | Would any money we send here be client money, and if so does that fit our CASS 5 position? |
| Account with an FX provider that is a bank | A deposit with that bank | The bank's own regulation and, for eligible depositors only, FSCS deposit protection | Is this bank an approved bank for our purposes, and how would any client money account here be designated? |
| The beneficiary's account | The insurer, reinsurer, claimant or supplier you are paying | Once paid, the money belongs to the beneficiary | Were the beneficiary's details verified through a channel we already trust? |
| InsuranceFX | Never holds money at any step | Not applicable | Nothing to ask. If anyone claiming to be InsuranceFX asks for money, treat it as fraud |
Follow one conversion through and ask the question at each step:
The money arrives
Premiums from insureds or producing brokers, or claims money from insurers, arrive where your arrangements say they must, which for client money is generally a client bank account at an approved bank. Ask: is this client money, risk transfer money or our own?
You instruct the conversion
Your authorised users instruct the provider. No money has moved yet. Ask: who may instruct, within what limits and with whose approval?
Funds move to settle it
The currency you are selling goes to the provider to settle the conversion. Ask your compliance officer: is this money client money at this point, and does sending it fit our CASS 5 position? It is the question that matters most, and only your firm can answer it.
The converted currency is credited
To the account your instructions name. Ask: is that the right account for this money, given whose money it is?
The payment is made
To the insurer, reinsurer, claimant or supplier. Ask: is the confirmation on the claim file or account record, and does the client money reconciliation reflect it?
Is money held by an FX payment institution protected like a bank deposit?
No. A payment or e-money institution safeguards customer money rather than holding it as a deposit, and the FSCS does not cover e-money or payment services.
Safeguarding means the provider must keep customer funds apart from its own, generally in a segregated safeguarding account at a bank or in approved secure assets, or covered by an insurance policy or comparable guarantee, so that they can be returned to customers if the provider fails. It protects against the provider's insolvency. It is not compensation.
The FCA's new safeguarding rules for payment and e-money firms came into force on 7 May 2026. They were set out in policy statement PS25/12, published on 7 August 2025, and sit in the CASS 15 chapter of the FCA Handbook. Among other things they require daily reconciliation of safeguarded funds, a monthly safeguarding return to the FCA, a resolution pack to help return funds quickly if a firm fails and, for certain firms, an annual safeguarding audit.
A bank is different. Money with a bank is a deposit, and FSCS deposit protection has covered eligible depositors up to £120,000 per person per bank since 1 December 2025. Not every depositor is eligible, and how deposit protection applies to client money in a client bank account is itself a question for your compliance officer.
Can a UK insurance broker use a specialist FX provider for premiums held as client money?
That is for your compliance officer and CASS auditor to decide, not InsuranceFX and not the provider. CASS 5 generally requires client money to be held in a client bank account at an approved bank, so take these questions to them before you agree anything.
Make the answer a pass or fail test before you compare prices. A provider that cannot fit your client money position is not a candidate, however good its rate.
About our position
- Which of the money we would convert is client money, which is held under risk transfer and which is our firm's own money?
- Do we hold client money on a statutory trust or a non-statutory trust, and does our trust deed say anything about currency or conversion?
- Which terms of business agreements give us risk transfer, for which insurers and classes, and do they cover claims and return premiums as well as premiums?
- Do any binding authority agreements or TOBAs require money to be held in a named account, in a named currency or with a named bank?
About the flow of money
- At each step of a conversion, where would the money be, and would it be client money at that point?
- Does sending any client money to this provider fit our CASS 5 position, and on what basis?
- Where would converted funds be credited, and is that account a client bank account at an approved bank?
- Could we keep client money where it is and use the provider only for our own money, such as commission, brokerage and expenses?
- Is the provider itself a bank, and if so is it an approved bank for our purposes?
About the provider
- What is its FCA authorisation type and firm reference number on the FCA Register?
- Does it safeguard customer money or take deposits? If it safeguards, which bank holds the safeguarding account, or which insurer or guarantor stands behind it?
- Will it describe in writing its safeguarding audit and resolution arrangements under the rules in force since 7 May 2026?
- Can accounts be opened in our firm's own name, with the approvals and user controls we need?
About records and reconciliation
- How would conversions appear in our client money calculation and reconciliation, and in which currency would we calculate?
- If a conversion produced an exchange difference on client money, how would it be treated and who would bear it?
- Will the provider's statements arrive in time and in a format our month-end reconciliation can use?
About the CASS audit and sign-off
- Does our CASS auditor want to review the arrangement before we start, and what evidence will it want to see?
- Do we need to tell the FCA, our insurers or our capacity providers about the change?
- Who in our firm signs off the change, and where is the sign-off recorded?
Can we hold premiums in US dollars and euros in our client account?
Ask your bank and your compliance officer. Banks offer client bank accounts in currencies other than sterling, and holding a premium in the currency it arrived in means it is not converted automatically on receipt.
For a broker or MGA that receives US dollar premiums and remits US dollars to the market, a currency client account can remove a conversion altogether. Only the amount you actually need in sterling, such as commission once you are entitled to take it, then needs converting, which cuts the volume exposed to a markup. Our page on premiums received in other currencies covers when to convert and when to hold.
Each currency account raises its own questions for your compliance officer:
- Is each currency account set up and designated as a client bank account, with whatever acknowledgement from the bank your compliance team requires?
- Is the client money calculation done currency by currency or in sterling, and at what rate are other currencies translated?
- Where does the conversion to the remittance currency happen, and who instructs it?
- Do any binders require remittance in a particular currency, so that holding premiums in that currency is the simplest route?
- Does the bank still convert anything automatically, for example a premium that arrives in a currency for which you have no account?
What happens to our money if an FX provider fails?
Safeguarded funds should be returned to customers through an insolvency process, which takes time. The FSCS does not cover e-money or payment services, so how well the provider safeguarded is what matters.
Argentex LLP, an FCA-authorised payment and e-money institution with FX clients, entered special administration on 21 July 2025 under the Payment and Electronic Money Institution Insolvency Regulations 2021. The FCA said at the time that FSCS protection does not include electronic money and payment services.
Return of safeguarded funds in a special administration is not instant. The administrators first reconcile the safeguarded funds and establish what each customer is owed. For a firm paying claims or remitting premiums against fixed dates, the wait is itself the problem. Questions worth asking before you choose a provider:
- Which bank holds the provider's safeguarding account, or which insurer or guarantor covers it?
- Does the provider keep a resolution pack, and will it describe it?
- How much of our money would normally sit with the provider at the end of a day, and could we reduce it?
- Do we already have a second route onboarded, so that premiums, remittances and claims can carry on if one provider stops?
- If any client money were affected, what would our obligations to our clients be and how would we meet them?
InsuranceFX records and dates each provider's FCA status and its stated safeguarding method before any introduction and at least once a year. That is a record of facts, not a view that any provider is safe.
Where can we read the client money and safeguarding rules ourselves?
In CASS 5 of the FCA Handbook for client money held by insurance intermediaries, and in the FCA's safeguarding rules for payment and e-money firms, in force since 7 May 2026.
- FCA Handbook, CASS 5: client money for insurance distribution activity. CASS 5.2 covers risk transfer, CASS 5.3 and 5.4 the statutory and non-statutory trusts and CASS 5.5 the segregation of client money.
- FCA policy statement PS25/12: changes to the safeguarding regime for payments and e-money firms, in force from 7 May 2026.
- FCA Register, to check any provider's authorisation type and firm reference number.
Your compliance officer and CASS auditor can tell you how the rules apply to your firm. Nothing on this page is legal or regulatory advice, and InsuranceFX does not give it.
Next: our staged switching plan puts the compliance sign-off before any client money flow moves. How InsuranceFX works sets out who does what. Brokers and MGAs will find their own flows on the pages for insurance and reinsurance brokers and MGAs and coverholders. Our regulatory status is on important information.
Sources
- Financial Conduct Authority, FCA Handbook CASS 5, checked 2 November 2026.
- Financial Conduct Authority, PS25/12: Changes to the safeguarding regime for payments and e-money firms, published 7 August 2025, checked 2 November 2026.
- Financial Conduct Authority, Argentex LLP enters special administration (including the FSCS position on e-money and payment services), checked 2 November 2026.
- Financial Services Compensation Scheme, Deposit limit increase, checked 2 November 2026.