COB 6.8 Insurance contracts: life and general

COB 6.8 applies to a firm which effects or carries outpure protection contracts, life policies or general insurance contracts. 1

A firm must ensure that, before entering into a pure protection contract with a client, it provides the client with the information specified in COB 6.5.49 R, unless, at the time of application, the client , other than an EEA ECA recipient, is habitually resident:

1. (1)

   (except for a distance contract with a retail customer) in an EEA State other than the United Kingdom; or6

2. (2)

   outside the EEA and he is not present in the United Kingdom.35

The information required by COB 6.8.3 R must be:

1. (1)

   provided to the customer either by the firm itself or by an intermediary authorised by the firm to act on its behalf; and

2. (2)

   in English, unless the customer requests it to be, and the firm agrees to it being, in another language.

[Deleted]51

COB 6.8.7 R and COB 6.8.8 R apply to a long-term insurer, unless, at the time of application, the client, other than an EEA ECA recipient, was habitually resident:

1. (1)

   in an EEA State other than the United Kingdom; or

2. (2)

   outside the EEA and he was not present in the United Kingdom.135

If during the term of a pure protection contract or life policy entered into on or after 1 July 1994 there is any proposed change in the information referred to in COB 6.5.49 R items (1) to (12), the long-term insurer must inform the policyholder of the effect of the change before the change is made.15

If a pure protection contract orlife policy entered into on or after 1 July 1994 provides for the payment of bonuses and the amounts of bonuses are unspecified, the long-term insurer must, in every calendar year except the first, either:

1. (1)

   notify the policyholder in writing of the amount of any bonus which has become payable under the contract, and which has not previously been notified under this rule; or

2. (2)

   give the policyholder in writing sufficient information to enable him to determine the amount of any such bonus.12

8Before entering into a general insurance contract with an individual when the United Kingdom is the State of the risk or the individual is an EEA ECA recipient, a firm must, subject to COB 6.8.13 R provide the individual with: 67

1. (1)

   details of its complaints procedure including, where appropriate, the existence of a complaints body, making it clear that its existence is without prejudice to the policyholder's right to take legal proceedings; and

2. (2)

   a statement whether the firm or policyholder is entitled to choose the law applicable to the contract and, if so, the law which the firm proposes to choose.135

COB 6.8.12 R does not apply if the contract has been submitted to the firm on behalf of a customer by an intermediary and:

1. (1)

   the intermediary is a member of the General Insurance Standards Council; or

2. (2)

   the firm has taken reasonable steps to determine that the intermediary has provided the information required by COB 6.8.12 R.

67[Deleted]

1. (1)

   When a firm provides information in accordance with COB 6.8.3 R, COB 6.8.7 R, COB 6.8.8 R or COB 6.8.12 R, it must provide the information in writing, unless (2) applies.

2. (2)

   If the contract is being made by telephone, the firm may give the information orally to the customer. If the customer enters into the contract, a written version of the required information must be sent to the customer within five business days of the contract being entered into.1

Where a pure protection contract, life policy or general insurance contractis effected jointly, the information required by COB 6.8.3 R, COB 6.8.7 R, COB 6.8.8 R, or COB 6.8.12 R may be sent to the first named customer.1

A firm must make an adequate record of information provided to a customer under COB 6.8 and retain that record for a minimum period after the information is provided of:

1. (1)

   six years in the case of a pure protection contract or life policy; or1

2. (2)

   three years in the case of a general insurance contract.1

The Society must ensure that no member carries on motor vehicle liability insurance business at Lloyd's unless a claims representative has been appointed to act for that member in each EEA State other than the United Kingdom, with responsibility for handling and settling claims arising from an accident in the cases referred to in article 1 of the Fourth Motor Insurance Directive.4

1. (1)

   When a motor vehicle liability insurer appoints a claims representative, it must give the MIIC and each other information centre the claims representative's name, business address, telephone number and effective date of appointment within ten business days of that appointment being made.

2. (2)

   If the information at (1) changes in any material way, the motor vehicle liability insurer must give the MIIC and each other information centre details of that change within ten business days of that change.4

A motor vehicle liability insurer must ensure that each claims representative is:

1. (1)

   resident or established in the EEA State for which it is appointed;

2. (2)

   capable of examining cases in the official language or languages of the EEA State of residence of the injured party;

3. (3)

   responsible for, and has sufficient delegated authority from the motor vehicle liability insurer for which it is appointed, to be able to:

   1. (a)

      handle and settle;

   2. (b)

      collect all information, and take all measures, reasonably necessary to negotiate a settlement of; and

   3. (c)

      represent, or arrange appropriate representation for, the motor vehicle liability insurer (whether in negotiations, in court or otherwise) in relation to;

   claims, arising from an accident occurring in an EEA State other than the EEA State of residence of the injured party, involving the use of a vehicle insured and normally based in an EEA State.4

1. (1)

   Within three months of receipt of a claim for damages from an injured party, or his representative, the motor vehicle liability insurer must (directly, or through a claims representative):

   1. (a)

      make a reasoned offer of settlement, if liability is admitted and damages have been fully quantified; or

   2. (b)

      provide a reasoned reply to the points made in the injured party's claim, if liability is denied, or not admitted, or the claim for damages has not been fully quantified.

2. (2)

   If liability is initially denied, or not admitted: within three months of any subsequent admission of liability, the motor vehicle liability insurer must (directly, or through a claims representative) make a reasoned offer of settlement, if, by that time, the relevant claim for damages has been fully quantified.

3. (3)

   If an injured party's claim for damages is not fully quantified when it is first made: within three months of the subsequent receipt of a fully quantified claim for damages, the motor vehicle liability insurer must (directly, or through a claims representative) make a reasoned offer of damages, if liability is admitted at that time.

4. (4)

   A claim for damages will be fully quantified under (1)(a), (2) or (3) when the injured party provides written evidence which substantiates or supports the amounts claimed.4

1. (1)

   If the motor vehicle liability insurer, or its claims representative, does not comply with COB 6.8.26 R(1)(a), (2) or (3), the motor vehicle liability insurer must pay simple interest on any damages eventually paid, unless interest is awarded by any tribunal which determines the injured party's claim.

2. (2)

   If (1) applies, the amount of interest that the motor vehicle liability insurer must pay must be calculated as follows:

   1. (a)

      the interest calculation period:

      1. (i)

         begins three months after:(A) receipt of the claim for damages, if the motor vehicle liability insurer or its claims representative breaches COB 6.8.26 R (1)(a) ; or(B) any subsequent admission of liability, if the motor vehicle liability insurer or its claims representative complies with COB 6.8.26 R (1)(a) but breaches COB 6.8.26 R (2); or(C) the subsequent receipt of a fully quantified claim for damages, if the motor vehicle liability insurer or its claims representative complies with COB 6.8.26 R (1)(a) and (2) but breaches COB 6.8.26 R (3); and

      2. (ii)

         ends on the date when the motor vehicle liability insurer pays compensation to the injured party, or the injured party's authorised representative;

   2. (b)

      the interest rate to be applied throughout the period in (a) is the Bank of England's base rate (from time to time), plus four per cent.4

A motor vehicle liability insurer will be taken to have received a claim, or a fully quantified claim, for damages when that claim, or fully quantified claim, for damages is delivered to the motor vehicle liability insurer, or a claims representative, by any person by any method of delivery which is lawful in the motor vehicle liability insurer's, or its claims representative's, respective State of residence or establishment.4