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    2024-07-31

FPCOB 12.1 Application and purpose

Application

FPCOB 12.1.1 R

1This chapter applies to a firm in relation to funeral plan provision and funeral plan distribution.

FPCOB 12.1.2 G

1A firm (including a funeral plan provider) that has accepted responsibility for funeral plan distribution undertaken by an appointed representative must ensure that the representative complies with this chapter as if it was an intermediary firm (see FPCOB 1.2.4R).

Purpose

FPCOB 12.1.3 G

1The rules in this chapter mitigate the risk of loss to customers on the insolvency of a firm engaged in funeral plan distribution. Such a firm cannot receive or handle payments for a funeral plan contract except in some limited circumstances by cheque or 2in the form of cash and can only receive or handle a cash payment if that contract will be effective from the moment of receipt.

FPCOB 12.2 Obligations on intermediaries

FPCOB 12.2.1 R

1A firm engaged in funeral plan distribution must not accept payments which are payable to a funeral plan provider under a funeral plan contract unless:

  1. (1)

    the payment is:

    1. (a)

      received as agent for the funeral plan provider;

    2. (b)

      made in cash;

    3. (c)

      made at the time the funeral plan contract is entered into by the firm as agent of the funeral plan provider; and

    4. (d)

      2deemed received by the funeral plan provider on receipt by the agent under the following contracts:

      1. (i)

        the funeral plan contract;

      2. (ii)

        the contract between the funeral plan provider and the agent; and

      3. (iii)

        (where the firm is using an appointed representative) the contract between the firm and the representative; or

  2. (2)

    [deleted]2

  3. (3)

    2the payment is made by cheque payable to the funeral plan provider and:

    1. (a)

      is paid into the bank account of the funeral plan provider promptly and, in any event, no later than three business days after receipt; or

    2. (b)

      is forwarded to the funeral plan provider promptly and, in any event, no later than 3 business days after receipt.

FPCOB 12.2.3 G

1The effect of FPCOB 12.2.1R is that a firm engaging in funeral plan distribution can only accept payment for a funeral plan contract if the payment is made by cheque payable to the funeral plan provider or 2in cash and, if cash, 2 the funeral plan provider will be bound by that contract from the moment that any cash 2payment is received by the firm.

FPCOB 12.2.4 R

1 FPCOB 12.2.1R does not apply to:

  1. (1)

    a funeral plan provider when distributing its own funeral plan contracts directly to customers; or

  2. (2)

    a payment which is an FP distribution charge.

FPCOB 12.3 Obligations on providers

FPCOB 12.3.1 R

1A funeral plan provider must ensure that its arrangements for another firm or an appointed representative to distribute funeral plan contracts:

  1. (1)

    prohibit that person from accepting payments payable to a funeral plan provider; or

  2. (2)

    prohibit such payments other than by cheque or 2in cash and:

    1. (a)

      are compatible with the requirements of FPCOB 12.2.1R; and

    2. (b)

      (for arrangements with a firm) make clear whether or not the firm is permitted to appoint appointed representatives to act as agent for the funeral plan provider in receiving contractual payment in cash2.

FPCOB 12.4 Appointed representatives

FPCOB 12.4.1 G

1A firm which appoints an appointed representative to distribute funeral plan contracts should prohibit the representative from accepting payments which are payable to a funeral plan provider under a funeral plan contract (other than an FP distribution charge) unless the conditions at FPCOB 12.2.1R are satisfied.

FPCOB 12.4.2 G

1For the purposes of FPCOB 12.2.1R (1)(c) a funeral plan contract would be entered into at the point that an appointed representative acting as agent of a funeral plan provider bound that funeral plan provider to its terms.

FPCOB 12.4.3 G

1Where a funeral plan provider appoints another firm to undertake funeral plan distribution in relation to its funeral plan contracts and that firm has an appointed representative who it permits to accept cash payment for that contract, FPCOB 12.2.1(1)(d)2would be satisfied where the appointed representative receives the cash payment as sub-agent for the funeral plan provider and the contracts which underpin the arrangements ensure this (including the contract between the firm and its representative).