ICOBS 1 Annex 1 Application (see ICOBS 1.1.2 R)

1

Third party processors

1.1

R

(1)

This rule applies where a firm (or its appointed representative) ("A") has outsourced insurance distribution activities7 to a third party processor.

(2)

Any rule in this sourcebook which requires the third party processor, when acting as such, to disclose its identity to a customer must be read as applying to the third party processor only to the extent that it applies to A and as requiring disclosure of A’s identity.

71.2

G

(1)

The disclosure required of the third party processor under ICOBS 4.3.-7R can be made without having to disclose the identity of the third party processor to the customer and therefore without breaching paragraph 1.1R(2) above.

2

Managing agents

2.1

R

(1)

References to an insurer7(including within the reference to insurance distributor) apply equally to a managing agent unless the context requires otherwise.

(2)

A managing agent must give effect to the policy that a consumer must, where required by this sourcebook, be offered cancellation rights.

(3)

References to managing agents in this sourcebook relate to their functions in managing the obligations of a member in his capacity as such.

3

Authorised professional firms

3.1

R

This sourcebook (except for ICOBS 4.6) does not apply to an authorisedprofessional firm with respect to its non-mainstream regulated activities except for:

(1)

the provisions on communications to clients and financial promotions (see ICOBS 2.2);

(2)

the e-commerce provisions (ICOBS 3.2);

(3)

general information7 disclosure requirements in relation to complaints procedures (see ICOBS 4.1); and

(4)

the UK provisions which implemented8 articles 1(4), 17, 18, 19, 20, 23, and 24 of the IDD7 (see ICOBS 2.2.2R (communication to customers and financial promotions), ICOBS 2.2.2AR (marketing communications), ICOBS 2.5.-1R (the customer’s best interests rule), ICOBS 2.6 (Distribution of connected contracts through exempt persons), ICOBS 4.1 (Information about the firm, its services and remuneration), ICOBS 4.1A (Means of communicating to customers), ICOBS 4.3 (remuneration disclosure), ICOBS 5.2 (Demands and needs), ICOBS 5.3.3R (Advice on the basis of a fair analysis), ICOBS 5.3.4R (Personalised explanation), ICOBS 6A.1.4R (Ensuring the customer can make an informed decision) and ICOBS 6A.3 (Cross-selling7)), except to the extent that the firm is subject to equivalent rules of its designated professional body approved by the FCA.

3.2

G

Compliance with the UK provisions which implemented8 the Distance Marketing Directive is dealt with in the Professional Firms sourcebook (see PROF 5.4).

4

Appointed representatives

4.1

R

(1)

An insurer must ensure that its appointed representative complies with this sourcebook as it applies to an insurance intermediary.

(2)

However, if the appointed representative is acting as the insurer'sthird party processor then:

(a)

this rule is subject to the third party processorsrule (see paragraph 1.1R); and

(b)

the insurer is not required to ensure that the appointed representative complies with the rules in this sourcebook on commission disclosure (see ICOBS 4.4)7.

4.2

G

The cancellation requirements in chapter 7 do not apply to a distance contract entered into by an appointed representative to provide distribution7 services. Regulations 9 (Right to cancel) to 13 (Payment for services provided before cancellation) of the Distance Marketing Regulations apply instead.

5

Service companies

5.1

R

This sourcebook does not apply to a service company, except for the provisions on communications to clients and financial promotions (see ICOBS 2.2).

6

Lloyd’s

8

8This sourcebook does not apply to the Society.

1

Reinsurance

1.1

R

This sourcebook does not apply to activities carried on in relation to a reinsurance contract.

[Note: recital 51 to the IDD]7

2

Contracts of large risks

2.1

R

Subject to Part 3 of this Annex:7

(1)

this sourcebook does not apply to a firm distributing a contract of large risks7 where the risk is located outside the United Kingdom8;

(2)

only ICOBS 2 (General matters) and ICOBS 6A.3 (Cross-selling) apply to a firm distributing a contract of large risks7 for a commercial customer where the risk is located within the United Kingdom8; and7

(3)

the IPID requirement in ICOBS 6.1.10AR (How must IPID information be provided?) and ICOBS 6 Annex 3R (Providing product information by way of a standardised insurance information document) do not apply to a firm distributing a contract of large risks.7

[Note:article 22(1) of the IDD]

2.2

G

Principle 7 continues to apply so a firm should provide evidence of cover promptly after inception of a policy to its customer. In respect of a group policy, a firm should provide information to its customer to pass on to other policyholders and should tell the customer the information should be given7to each policyholder.

52.3

R

ICOBS 6.2.3 R does not apply to contracts of large risks7.

[Note: article 184(1) of the Solvency II Directive]

3

Pure protection contracts: election to apply COBS rules

3.1

R

(1)

This sourcebook (except for ICOBS 4.6)3 does not apply in relation to a pure protection contract to the extent that a firm has elected to comply with the Conduct of Business sourcebook (COBS) in respect of such business.

(2)

Within the scope of such an election, a firm must:

(a)

comply with the rest of the Handbook (except for COBS 6.1A, COBS 6.1B and COBS 6.1.9 R) treating the pure protection contract as a life policy and a designated investment, and not as a non-investment insurance contract; and3

(b)

if applicable, also comply with ICOBS 4.6.3

(3)

A firm must make, and retain indefinitely, a record in a durable medium of such an election (and any reversal or amendment). The record must include the effective date and a precise description of the part of the firm's business to which the election applies.

4

Chains of insurance intermediaries

4.1

R

Where there is a chain of insurance intermediaries between the insurer and the customer, this sourcebook, except ICOBS 27, applies to any7insurance intermediary in contact with the customer.

74.2

G

ICOBS 2 applies to all insurance intermediaries, including those within a chain who are not in contact with the customer.

95

Travel insurance contracts

5.1

R

The In addition to the general application rule in ICOBS 1.1.1R,10 the provisions in ICOBS 6.1.7-AG, ICOBS 6.5.1AG and ICOBS 6A.4 also apply to10:to incoming firms that provide cross border services other than:

(1)

an incoming firm in respect of that part of its business that is carried on as an electronic commerce activity from another EEA State; orTP firms and Gibraltar-based firms which carry on business from an establishment in the United Kingdom10; or

(2)

10(a)

10 TP firms and Gibraltar-based firms that provide services from an establishment outside the United Kingdom, (other than where the state of the risk is an EEA State or Gibraltar, and to the extent that the EEA State in question or Gibraltar imposes measures of like effect); and

10(b)

firms operating from an establishment overseas; and

10with a customer in the United Kingdom.

105.2

G

Unless the contrary intention appears, a reference to Gibraltar-based firm in paragraph 5.1 above has the same meaning as in the Gibraltar Order.

1

EEA territorial scope rule: compatibility with European law [deleted]8

2

Exemption for insurers: business with non-UK8 customers via non-UK intermediaries

2.1

R

This sourcebook does not apply to an insurer if:

(1)

the intermediary (whether or not an insurance intermediary) in contact with the customer is not established in the United Kingdom; and

(2)

the customer is not habitually resident in, and, if applicable, the State of the risk is outside the United Kingdom8.

3

Exemption for insurers: business with non-UK EEA customers [deleted]8

Part 4: Guidance [deleted]8