ICOB 7.1 Application and purpose

An insurer is responsible for claims handling. A managing agent is responsible for claims handling for policies underwritten at Lloyd's. An insurer or managing agent remains responsible for claims handling if it outsources any of its claims related activities, including where it gives an intermediary authority to handle claims on its behalf. An insurer or a managing agent is not responsible for the administration and performance activities that an insurance intermediary carries out on behalf of a customer in connection with a claim. In relation to these activities, the insurance intermediary should refer to ICOB 7.4.

An insurer should refer to the rules and guidance set out in SUP 2.3.5 to SUP 2.3.10 in respect of any person to whom it outsources its claims handling functions.

All of this chapter, except ICOB 7.6, applies to claims made by retail customers. Part of ICOB 7.3, all of ICOB 7.4 and all of ICOB 7.7 apply to claims made by commercial customers. ICOB 7.6 applies to claims by injured parties arising from an accident occurring in an EEA State other than the EEA State of residence of the injured party, involving the use of a vehicle insured and normally based in an EEA State.

1. (1)

   The purpose of this chapter is to ensure that:

   1. (a)

      claims are handled fairly;

   2. (b)

      claims are settled promptly;

   3. (c)

      customers are provided with information on the claims handling process, and with an explanation of why a claim is rejected or not settled in full, where relevant; and

   4. (d)

      insurance intermediaries disclose and manage any conflicts of interest that may exist.

2. (2)

   This chapter reinforces:

   1. (a)

      Principle 3 (Management and control), which requires a firm to take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems;

   2. (b)

      Principle 6 (Customers interests), which requires a firm to pay due regard to the interests of its customers and treat them fairly; and

   3. (c)

      Principle 8 (Conflicts of interest), which requires a firm to manage conflicts of interest fairly, both between itself and its customers and between a customer and another client.

3. (3)

   The purpose of ICOB 7.6 is to transpose certain requirements of the Fourth Motor Insurance Directive