Content Options:

Content Options

View Options:

GIGI 3.2 Financial promotion (ICOB 3)

Introduction

GIGI 3.2.1G

Financial promotions include but are not limited to advertisements. A financial promotion is an invitation or inducement to engage in an investment activity (which includes insurance). They can be solicited or unsolicited and can take a variety of forms, such as mailshots and newspaper or TV advertisements. The financial promotion rules relating to non-investment insurance contracts (which we call 'non-investment financial promotions') are in ICOB 3.

What is the scope of the financial promotion rules?

GIGI 3.2.2G

Financial promotions are prohibited unlessthey are communicated by an authorised person; or an authorised person has approved the content of the promotion; or an exemption applies. There is a wide range of exemptions from the financial promotion rules. The scope of the rules, including a full list of the exemptions, is set out in ICOB 3.1 to ICOB 3.6.

GIGI 3.2.3G

Even if the rules in ICOB 3 do not apply, because your promotion falls within an exemption, other rules in ICOB still apply. For example, you would still need to comply with ICOB 2.2.3 R, which says that communications must be clear, fair and not misleading. You may also need to give the information required by ICOB 4 (advising and selling standards) and ICOB 5 (product information) as part of the promotion e.g. if that is the only way to ensure that the customer receives this information before the conclusion of the contract.

What rules apply to regulated non-investment financial promotions?

GIGI 3.2.4G

Where ICOB 3 applies, you must be able to show that you have taken reasonable steps to ensure that the non-investment financial promotion is clear, fair and not misleading (ICOB 3.8.1 R). ICOB 3.8.2 E contains a 'checklist' of matters you should bear in mind when communicating or approving a non-investment financial promotion.

What rules apply to regulated non-investment financial promotions?

GIGI 3.2.5G

In addition, ICOB 3.8.3 G contains guidance on the clear, fair and non-misleading obligation which includes the following points:

  1. (1)

    if a promotion is directed at a particular group of recipients who are expected to have particular knowledge of the contract being promoted, this should be clear;

  2. (2)

    any quotations of opinion should be a fair representation and it should be made clear if there is a connection between the person expressing the opinion and the firm;

  3. (3)

    price quotations, if they are not precise, should be representative, and it should be stated clearly if a quote is an estimate only; and

  4. (4)

    if the promotion says that you can reduce a premium, give the cheapest premium or reduce other costs, the promotion should give equal prominence to explaining how this will be achieved, and should explain with equal prominence any significant limitations on the availability of the savings offered.