ICOB 4.1 Application and purpose

Application: who and what?

ICOB 4.1.1 R 14/01/2005

(1)
Subject to ICOB 4.1.4 R, this chapter applies to an insurance intermediary in accordance with ICOB 4.1.3 R.
(2)
ICOB 4.7 (Unsolicited services) also applies to an insurer or managing agent when acting as a product provider.
(3)
Throughout this chapter, references to an insurer apply equally to a managing agent.

ICOB 4.1.2 G 14/01/2005

(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)
For the limited application of this chapter to authorised professional firms in respect of their non-mainstream regulated activities, see ICOB 1.2.10 R(3) and ICOB 1.2.10 R(4).

ICOB 4.1.3 R 06/03/2006

This table belongs to ICOB 4.1.1 R.

Insurance mediation activity	Type of customer	Applicable section
arranging except introducing	retail customer	Whole chapter except ICOB 4.3 and ICOB 4.6
arranging except introducing	commercial customer	Whole chapter except ICOB 4.2.19 R, ICOB 4.3 and ICOB 4.71
advising	retail customer	Whole chapter except ICOB 4.6
advising	commercial customer	Whole chapter except ICOB 4.2.19 R and ICOB 4.71
introducing	retail customer and commercial customer	ICOB 4.2.9 R and ICOB 4.2.10 G only

ICOB 4.1.4 R 06/03/2006

The following provisions in ICOB do not apply to an insurance intermediary that is an insurer:

(1)
ICOB 4.2 (Status disclosure) except ICOB 4.2.4 G to ICOB 4.2.7 R (permitting use of the initial disclosure document and combined initial disclosure document) and ICOB 4.2.19 R (overseas business for UK retail customers), provided that when providing the service on the telephone to a retail customer wishing to enter into a non-investment insurance contract, the insurer proceeds on the basis of providing at least the following information:
1
1. (a)
  its name;1
2. (b)
  (if it initiated the call) the commercial purpose of the call; and1
3. (c)
  the identity of the person in contact with the customer and his link with the insurer;1
(2)
1ICOB 4.4.1R (1) (Statement of demands and needs), in accordance with ICOB 4.4.2R (1) and (1A) (commercial customers and non-advised sales to retail customers)1; and
(3)
ICOB 4.6 (Commission disclosure for commercial customers).

1However, an insurer must ensure that its appointed representative nevertheless complies with the requirements of this chapter (unless acting as the insurer's third party processor).

ICOB 4.1.5 G 14/01/2005

When a contract of insurance is renewed, the parties enter into a new contract of insurance, even if the terms and conditions of the new contract are identical to the old one. ICOB 4 therefore applies to the renewed contract of insurance as it would to the original contract of insurance, unless stated otherwise in ICOB 4.2.20 R.

ICOB 4.1.6 G 14/01/2005

(1)
This chapter amplifies Principle 6 (Customer's interests), Principle 7 (Communications with clients) and Principle 9 (Customers: relationships of trust). Principle 6 requires a firm to pay due regard to the interests of its customers and treat them fairly. Principle 7 requires a firm to pay due regard to the information needs of its clients and communicate information to them in a way which is clear, fair and not misleading. Principle 9 requires a firm to take reasonable care to ensure the suitability of its advice.
(2)
This chapter also implements articles 12 and 13 of the Insurance Mediation Directive for non-investment insurance contracts (which means that, in respect of communications by telephone, it follows the approach in article 3 of the Distance Marketing Directive).
(3)
This chapter also implements article 9 of the DMD for non-investment insurance contracts concluded by distance means.

ICOB 4.1.7 G 06/03/2006

The purpose of this chapter is to ensure that:

(1)
customers are adequately informed about the nature of the service that they have received from an insurance intermediary in relation to non-investment insurance contracts. In particular, insurance intermediaries need to make clear to customers the scope and type of the products and insurance undertakings on which their service is based;
(2)
where a personal recommendation is made it is suitable for a customer's demands and needs. The nature of the steps an insurance intermediary will need to take to ensure that the customer receives a personal recommendation that is suitable will vary depending on the demands and needs of the customer, the type of non-investment insurance contract being offered, and the type of customer (retail customer or commercial customer);
(3)
customers receive a statement of their demands and needs and the reasons for any personal recommendation made by an insurance intermediary;
(4)
[deleted]1
1
(5)
if requested by a commercial customer, the insurance intermediary discloses its commission; and
(6)
retail customers are not charged for non-investment insurance contracts concluded by distance means without their prior consent.