ICOB 1.2 General application: who? what?

1. (1)

   The definition of insurance intermediary includes an insurer when the insurer is carrying on insurance mediation activities, for example when, through its sales force, it advises on or arranges its own non-investment insurance contracts or those of another insurer.

2. (2)

   In relation to (1), insurers should note that PRU 7.6.13 R prevents an insurer from carrying on an insurance mediation activity in respect of a third party's products, unless the insurer can show that there is a natural fit or necessary connection between the insurer's insurance business and the third party's products.3

3. (3)

   Firms which outsource regulated activities are reminded of the guidance on outsourcing in SYSC 3.2.4 G.4

A table summarising the application of the various chapters of ICOB to firms is set out in ICOB 1 Annex 1 G. For the detailed application of each chapter, see the application rule at the start of that chapter.

All chapters of ICOB are relevant to a firm that deals with a retail customer. Certain chapters of ICOB apply in part only or not at all if a firm is dealing with a commercial customer. Guidance on the term retail customer is set out in ICOB 1.7.3 G(1).

1. (1)

   7In ICOB 2 (General rules) and ICOB 7 (Claims handling) (and in ICOB 1 (Application and purpose) in respect of those chapters), a customer is a policyholder or a prospective policyholder. Otherwise, only a policyholder or prospective policyholder who makes the arrangements preparatory to him concluding the contract of insurance (directly or through an agent) is a customer.

2. (2)

   A policyholder includes anyone who, upon the occurrence of the contingency insured against, is entitled to make a claim directly to the insurance undertaking.

1. (1)

   An insurer must comply with the following ICOB requirements, which are applicable to insurers as product providers, if its non-investment insurance contracts are sold through an intermediary to whom ICOB does not apply (because the intermediary is not a firm) or if its non-investment insurance contracts are connected contracts:

   1. (a)

      ICOB 2 (General rules (including unfair inducements));

   2. (b)

      ICOB 3 (Financial promotion) if the insurer communicates or approves a financial promotion;

   3. (c)

      ICOB 4.7 (Unsolicited services);

   4. (d)

      ICOB 5 (Product disclosure) as explained in ICOB 5.2;

   5. (e)

      ICOB 6 (Cancellation) except for general insurance contracts and connected contracts that are not distance contractsICOB 6.1.5 R (5) and (6); and

   6. (f)

      ICOB 7 (Claims handling).

2. (2)

   The circumstances in (1) may occur where article 72B of the Regulated Activities Order excludes certain regulated activities from regulation when carried on by providers of non-motor goods and services related to travel in relation to connected contracts. Guidance on the conditions that need to be satisfied by connected contracts is contained in PERG 5.11.13G to PERG 5.11.15G5.

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Other parts of the Handbook apply where relevant to an insurance intermediary within ICOB 1.2.8 R, including Principle 7 (Communications with customers) instead of ICOB 2.2.3 R, which restates Principle 7 in slightly amended form.

2A provision in ICOB that applies to an insurer when acting as product provider or as a motor vehicle liability insurer applies where relevant in relation to contracts of large risks where the risk is located within the European Economic Area.

1. (1)

   Compliance by an authorised professional firm with provisions of the Distance Marketing Regulations is dealt with in PROF 5.4 .

2. (2)

   The effect of ICOB 1.2.10 R(4) is that if the relevant designated professional body of an authorised professional firm does not make rules implementing articles 12 and 13 of the IMD applicable to authorised professional firms those authorised professional firms will need to comply with those sections of ICOB which implement articles 12 and 13 of the IMD, namely ICOB 4.1to ICOB 4.4 and ICOB 4.8.

1. (1)

   All chapters of ICOB are relevant to a firm that deals with a retail customer unless ICOB 1.2.15 R applies. Certain chapters of ICOB apply in part only or not at all if a firm is dealing with a commercial customer.

2. (2)

   A policyholder7 includes a member of a group policy who did not conclude the group policy with the insurance undertaking but who is entitled under the terms of that policy to make a claim on the insurance undertaking. This would include a dependant of a policyholder member of a group policy if that dependant has a direct right to claim. Where a customer7 concludes7 a group policy, 7only limited provisions in ICOB will apply to other policyholders7 as specified in ICOB 1.2.15 R and by the definition of customer7.

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3. (3)

   A person whose right or interest in a contract of insurance that is a group policy does not entitle him to make a claim directly to an insurance undertaking (for example, because he is required to make his claim to an employer or trustees) is not a customer or a policyholder7.

4. (4)

   ICOB 5.3.29 R and 7ICOB 5.4.8 R provide for customers7 who conclude group policies to be given a policy summary, unless the customer is a commercial customer and there is no policyholder who is capable of being a retail customer7, and to be informed that they should give that policy summary to each policyholder who is capable of being a retail customer7.

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5. (5)

   ICOB 1.2.15 R applies regardless of how a person becomes a policyholder under a group policy, for example automatically as part of a contract of employment, or voluntarily as part of a flexible benefits package.