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ICOBS 6.5 Renewals

Renewals

ICOBS 6.5.1R
  1. (1)

    1This section applies when a firm proposes to a consumer the renewal of a general insurance contract, which is not a group policy, and which has a duration of 10 months or more.

  2. (2)

    In this section, ‘renewal’ means carrying forward a policy, at the point of expiry and as a successive or separate operation of the same nature and duration as the policy, with the same insurance intermediary or the same insurer.

  3. (3)

    The firm must provide to the consumer the following information in good time before the renewal:

    1. (a)

      the premium to be paid by the consumer on renewal;

    2. (b)

      in a way that is consistent with the presentation of (a) so that they can be easily compared:

      1. (i)

        except where (ii) applies, the premium for the policy which the firm proposes to renew, as set out at the inception of that policy;

      2. (ii)

        where one or more mid-term changes were made to the policy which the firm proposes to renew, an amount calculated by annualising (or otherwise adjusting as appropriate to the duration of the proposed policy) the premium in effect following the most recent mid-term change, excluding all fees or charges associated with those mid-term changes;

    3. (c)

      a statement alongside (a) and (b) indicating that the consumer:

      1. (i)

        should check that the level of cover offered by the renewal is appropriate for their needs; and

      2. (ii)

        is able, if they so wish, to compare the prices and levels of cover offered by alternative providers4; and

    4. (d)

      a statement informing the consumer whether the contract will automatically renew or whether the consumer needs to take action to accept the renewal offer.

  4. (4)

    Where the proposed renewal will be the fourth or subsequent renewal the consumer has entered into in respect of the policy, the firm must include the following statement, to appear alongside the matters required by (3)(a), (b) and (c)(i) (but omitting (c)(ii)): “You have been with us a number of years. You may be able to get the insurance cover you want at a better price if you shop around.”

  5. (5)

    The firm must communicate the information in (3) and (4):

    1. (a)

      clearly and accurately;

    2. (b)

      in writing or another durable medium; and

    3. (c)

      in a way that is accessible and which draws the consumer’s attention to it as key information.

ICOBS 6.5.1AG
  1. (1)

    23When a firm proposes to a consumer the renewal of a travel insurance policy, the firm should at the same time:

    1. (a)

      disclose to the consumer whether any medical condition exclusion can be removed from the policy (in whole or in part); and

    2. (b)

      if so, how, and the terms on which it can be removed.

  2. (2)

    Firms are reminded of their obligations in:

    1. (a)

      ICOBS 6A.4.5R, where one or more of the circumstances set out in ICOBS 6A.4.6R applies in respect of the policy proposed on renewal; and

    2. (b)

      ICOBS 5.2.2BR to ensure the policy proposed is consistent with the consumer’s insurance demands and needs.

ICOBS 6.5.2G

1A firm should have regard to the record-keeping obligations referred to in ICOBS 2.4.1G and ensure that it has appropriate systems and controls in place with respect to:

  1. (1)

    the adequacy of its records so it may fulfil its regulatory and statutory obligations; and

  2. (2)

    the sufficiency of its records to enable the FCA to monitor the firm’s compliance with the requirements under the regulatory system.

ICOBS 6.5.3G

1A firm should ensure it complies with the other requirements in ICOBS that are relevant, such as providing product information to customers (see ICOBS 6.1), including the requirement to provide an IPID (see ICOBS 6.1.10AR).