Buildings insurance commissions: what you are entitled to know
Buildings insurance is often the largest single line in a block’s service charge, and it is the line leaseholders most often suspect is inflated. Since the end of 2023 you have had a specific right to see what commission is being taken out of your premium, and by whom. This page explains that right, what is coming next, and how to use both.
The rule that already applies
The Financial Conduct Authority’s rules on multi-occupancy buildings insurance sit in ICOBS 6A.7 of its Handbook and came into force on 31 December 2023. They apply to insurers and brokers, not to your landlord — but leaseholders are the intended beneficiaries.
Under ICOBS 6A.7.3R, five things must be provided as soon as reasonably practicable after the policy is concluded and again on every renewal:
a summary of the cover
pricing information
remuneration information
placing and shopping-around information (brokers and other intermediaries only)
conflicts of interest information (intermediaries only)
Firms may provide this directly to leaseholders where they hold the contact details, rather than only to the freeholder or agent who bought the policy.
The part that matters most
ICOBS 6A.7.8R requires disclosure of the total commission the firm and any associate receives — and, separately, any remuneration or financial incentive paid to a third party, in particular the freeholder or managing agent, where it is likely to be passed on in leaseholder charges.
ICOBS 6A.7.9R requires those figures in cash terms, estimated if necessary. Not a percentage, not a range: a number.
This is the provision that changed the conversation. Before it, a leaseholder asking what the broker earned was told it was commercially confidential. That answer is no longer available.
Who has to give you what
Under ICOBS 6A.7.21R the work is split. The insurer produces the summary of cover and the pricing information. The intermediary produces the remuneration, placing and conflicts disclosures. Whichever firm is in contact with the customer is responsible for actually delivering it.
In practice, if you are not receiving it, ask your managing agent for the disclosure documents for the current policy year. If the agent is also the broker, or is connected to the broker, that is precisely what the conflicts disclosure exists to reveal.
Your separate rights under the 1985 Act
These are older, they sit alongside the FCA rules, and they are enforceable against the landlord rather than the insurer.
The Schedule to the Landlord and Tenant Act 1985 gives a leaseholder paying insurance through the service charge the right to require a written summary of the insurance — the sums insured, the insurer’s name and the risks covered — and the right to inspect the policy and the evidence of payment, with reasonable facilities provided free of charge. The landlord has 21 days to comply.
Failure to comply without reasonable excuse is a summary offence, punishable by a fine at level 4 on the standard scale. Very few leaseholders know this, and very few landlords are reminded of it.
The Schedule also lets you notify the insurer of a potential claim yourself, and challenge a landlord’s nominated insurer where the cover is unsatisfactory or the premium excessive.
What is coming, and what is not yet law
This is where most published guidance is wrong, so it is worth stating precisely.
Section 59 of the Leasehold and Freehold Reform Act 2024 would insert new sections 20G to 20I into the 1985 Act. The effect would be substantial: a landlord could no longer recover “excluded insurance costs” — broadly, payments for arranging or managing insurance that are not a defined “permitted insurance payment”, including commissions and incentives — through a variable service charge. Section 20H would let a leaseholder recover money already paid, with the tribunal able to award up to three times the prohibited amount.
None of that is in force. Section 59 was not commenced at Royal Assent and remains uncommenced, because “permitted insurance payment” has to be defined in regulations that have not been made. Section 60, the duty to give tenants information about insurance, is in the same position. A written ministerial statement of 15 July 2026 said the service charge transparency measures would be laid in Parliament “later this year” through a minimum of five statutory instruments, without giving a date.
So today the position is: disclosure yes, prohibition no. You can find out what the commission is. You cannot yet refuse to pay it on that ground alone — though an unreasonable insurance cost has always been challengeable under section 19, and you can apply to the tribunal under section 27A.
What to do with the number once you have it
A commission is not automatically improper. Placing and administering a block policy is real work and it is reasonable to be paid for it. What the disclosure lets you do is judge proportion: a figure in the low hundreds on a modest block reads differently from several thousand pounds on the same building. Compare it against the premium, against last year, and against what the agent’s management fee already covers.
If the answer looks wrong, the route is section 19 reasonableness and section 27A, not a refusal to pay.
How Temphis handles it
We tell you the commission position on your building’s policy in writing, whether or not you ask, and our published fee schedule sets out what we charge separately so there is nothing to reconcile later.
Ask us about your building
If you are a leaseholder or resident director who has asked for the insurance disclosure and not received it, tell us what happened and we will tell you what your next step is — client or not.