ICOB 2.2 Communication

The purpose of ICOB 2.2.3 R is to restate, in slightly amended form, and as a separate rule, the part of Principle 7 (Communications with clients) that relates to communication of information. This enables a customer, who is a private person, to bring an action for damages under section 150 of the Act (Contravention of rules) to recover loss resulting from a firm referred to in ICOB 2.1.1 R communicating information in the course of regulated activities in a way that is not clear or fair or that is misleading.

When considering how to comply with the requirements of ICOB 2.2.3 R, a firm should have regard to the customer's knowledge of the contract of insurance to which the information relates.

ICOB 2.2.3 R covers all communications with customers, for example, any oral or written statements, telephone calls and any correspondence which is not a non-investment financial promotion to which ICOB 3 (Financial promotion) applies. In respect of non-investment financial promotions, firms should note the separate requirements of ICOB 3.

Prominence of relevant information can play a key role in ensuring that a communication is clear, fair and not misleading. Where this is the case, the FSA will assess prominence in the context of the communication as a whole. Use can be made of the positioning of text, background and text colour and type size to ensure that specified information meets the requirements of ICOB.

A firm should make every effort to ensure that information is presented clearly, fairly and in a way that does not mislead, whether it is to be viewed as a hard copy, as an electronic document on screen or presented on some other medium (such as audio-tape for visually-impaired customers). A firm should:

1. (1)

   use materials and design (including paper size, colour, font type and font size, tone and volume) to present the information legibly and accessibly, and in a balanced way;

2. (2)

   use emphasis sparingly; and

3. (3)

   not use differential font sizes or positioning so that the impact on a customer of some information (e.g. significant conditions, exclusions from the scope of cover or charges made to customers) is likely to be materially less than other provisions, parts or pages of the document.

1A firm which offers general insurance contracts, providing benefits for the customer's care in the event of the customer's disability or incapacity, should avoid using terms which state expressly or imply that the policy will be available for the customer to claim on in the long-term, that is, for any period beyond the expiry of the policy. So a general insurance contract should not be promoted as being capable of providing long-term care insurance for the customer in the long-term, and expressions such as "long-term care" and "lifetime care" should generally be avoided in relation to general insurance contracts. If a general insurance contract provides benefits over the long-term in the event of a claim being made, a firm should make clear that the long-term aspect relates only to the availability of benefits in the event of a claim, not to the duration of the policy itself.