1This section applies to a firm which sells a GAP contract to a customer in connection with the sale of a vehicle by:

1. (1)

   the firm; or

2. (2)

   a person connected to the firm.

1. (1)

   1Before a GAP contract is concluded, a firm must give the customer the following information:

   1. (a)

      the total premium of the GAP contract, separate from any other prices;

   2. (b)

      the significant features and benefits, significant and unusual exclusions or limitations, and cross-references to the relevant policy document provisions;

   3. (c)

      whether or not the GAP contract is sold in connection with vehicle finance, that GAP contracts are sold by other distributors;

   4. (d)

      the duration of the policy;

   5. (e)

      whether the GAP contract is optional or compulsory;

   6. (f)

      when the GAP contract can be concluded by the firm, as described in ICOBS 6A.1.6R and ICOBS 6A.1.7R; and

   7. (g)

      the date the information in (a) to (f) is provided to the customer.

2. (2)

   This information must be communicated in a clear and accurate manner and on paper2 or another durable medium in accordance with ICOBS 4.1A2.

3. (3)

   This information must be drawn to the customer’s attention and must be clearly identifiable as key information that the customer should read.

1Except as specified in ICOBS 6A.1.7R, a GAP contract cannot be concluded by a firm until at least 2 clear days have passed since the firm complied with ICOBS 6A.1.4R.

1A firm can conclude a GAP contract the day after providing the information in ICOBS 6A.1.4R to a customer if the customer:

1. (1)

   initiates the conclusion of the GAP contract; and

2. (2)

   consents to the firm concluding the GAP contract earlier than provided for in ICOBS 6A.1.6R, and confirms that they understand the restriction in ICOBS 6A.1.6R.

1. (1)

   1A firm must not enter into an agreement with a customer under which a charge is, or may become, payable for an optional additional product unless the customer has actively elected to obtain that specific product.

2. (2)

   A firm must not impose a charge on a customer for an optional additional product under an agreement entered into on or after 1 April 2016 unless the customer has actively elected to obtain that specific product before becoming bound to pay the charge.

3. (3)

   A firm must not invite or induce a customer to obtain an optional additional product for which a charge will be, or may become, payable if the firm knows or has reasonable cause to suspect that:

   1. (a)

      a contravention of (1) or (2) will take place with respect to the product; or

   2. (b)

      the person supplying the optional additional product will act in a way that would contravene (1) or (2) if that person were a firm.

4. (4)

   An omission by a customer is not to be regarded as an active election for the purpose of this rule.

5. (5)

   It is immaterial for the purposes of (3) whether or not the firm would or might be a party to the agreement for the optional additional product.

6. (6)

   A charge includes a financial consideration of any kind whether payable to the firm or any other person.

7. (7)

   [deleted]2

8. (8)

   If the customer is required to obtain an additional product as a condition for the purchase of the non-investment insurance contract then that product is an optional additional product if the customer is given a choice:

   1. (a)

      as to the seller or supplier from whom to obtain the product; or

   2. (b)

      which specific product to obtain.

9. (9)

   It is immaterial for the purposes of (7) and (8) whether the optional additional product is obtained from the firm or another person.

10. (10)
    1. (a)

       If, under the terms and conditions of an optional additional product, there is to be an automatic renewal of the agreement on substantially the same terms, it suffices for the purposes of (1) to (3) if the customer actively elected before entering into the initial agreement or a preceding renewal to obtain the product.

    2. (b)

       An automatic renewal of the agreement is not to be regarded as being on substantially the same terms if, following the renewal, a charge will or may become payable for the optional additional product for the first time (in which case, (1) to (3) apply at the time of the renewal).

    3. (c)

       Except as set out in (b), changes in the level of charges for an optional additional product are to be disregarded in determining whether an automatic renewal of an agreement is on substantially the same terms.

11. (11)

    A customer may make an active election for the purposes of this rule through an intermediary in the sales process or through a person acting on behalf of the firm.

1When offering a non-insurance ancillary product or service as part of a package or the same agreement with an insurance product, a firm must:

1. (1)

   inform the customer whether it is possible to buy the different components separately and, if so must provide the customer with an adequate description of:

   1. (a)

      the different components;

   2. (b)

      where applicable, any way in which the risk or insurance coverage resulting from the agreement or package differs from that associated with the components taken separately; and

2. (2)

   provide the customer with separate evidence of the costs and charges of each component.

[Note: articles 24(1) and (2) of the IDD]

1When offering an insurance product ancillary to and as part of a package or in the same agreement with a non-insurance product or service, a firm must offer the customer the option of buying the non-insurance goods or services separately.

1 ICOBS 6A.3.2R does not apply where the non-insurance product or service is any of the following:

1. (1)

   investment services or activities;

2. (2)

   a credit agreement as defined in point 3 of article 4 of the MCD which is:

   1. (i)

      an MCD credit agreement; or

   2. (ii)

      an exempt MCD credit agreement; or

   3. (iii)

      a CBTL credit agreement; or

   4. (iv)

      a credit agreement referred to in articles 72G(3B) and (4) of the Regulated Activities Order;

3. (3)

   a payment account as defined in regulation 2(1) of the Payment Accounts Regulations.

[Note: article 24(3) of the IDD]

1This section does not prevent the distribution of insurance products which provide coverage for various types of risks (multi-risk insurance policies).

[Note: article 24(5) of the IDD]

1This section applies in relation to a travel insurance policy, which is not:

1. (1)

   a group policy; or

2. (2)

   a policy entered into by a commercial customer.

1. (1)

   1A firm must include the details of a medical cover firm directory on the page of its website where it markets travel insurance policies.

2. (2)

   The information required by (1) must:

   1. (a)

      be provided in a prominent, clear and accurate manner; and

   2. (b)

      include the contact details of the medical cover firm directory, including its telephone number and a link to its website;

3. (3)

   The obligations in (1) and (2) apply 30 calendar days from the date on which the firm becomes aware (or ought reasonably to have become aware) of a publicly available directory that meets the requirements of a medical cover firm directory.

1. (1)

   12Where one or more circumstances set out in ICOBS 6A.4.6R applies, the firm that is responsible for communicating with the consumer under this sourcebook, must also communicate to the consumer:

   1. (a)

      the contact details, including telephone number and website, of the medical cover firm directory;

   2. (b)

      the purpose of the medical cover firm directory; and

   3. (c)

      the potential benefits of accessing the medical cover firm directory and any other relevant considerations.

2. (2)

   The firm must communicate the information in (1):

   1. (a)

      in a manner that is prominent, clear and accurate; and

   2. (b)

      in accordance with ICOBS 4.1A.

1 2The circumstances for the purposes of ICOBS 6A.4.5R are where a firm:

1. (1)

   declines, or otherwise does not offer, a consumer a quotation due (wholly or partly) to a medical condition;

2. (2)

   cancels a consumer’spolicy due (wholly or partly) to a medical condition;

3. (3)

   offers a policy with a medical condition exclusion which cannot be removed from the policy;

4. (4)

   offers a policy with a medical condition premium of £100 or more; and/or

5. (5)

   offers a policy in respect of which the medical condition premium is not known.

1 2A firm need not comply with ICOBS 6A.4.5R where it is contemporaneously able to communicate an offer to a consumer of a travel insurance policy in respect of which none of the circumstances set out in ICOBS 6A.4.6R apply.

1 2A firm need not comply with ICOBS 6A.4.5R where all the following conditions are met:

1. (1)

   the firm is listed on a medical cover firm directory;

2. (2)

   the firm is aware that the consumer has already accessed the medical cover firm directory in respect of the same risk; and

3. (3)

   only ICOBS 6A.4.6R (4) applies.

1 2A firm must not rely on the exception in ICOBS 6A.4.8R or ICOBS 6A.4.9R where it would still be in the consumer’s best interests to provide the communication under ICOBS 6A.4.5R.

2In good time before the conclusion of a policy including on any renewal, a firm offering retail premium finance in relation to that policy must give the customer:

1. (1)

   price information about:

   1. (a)

      the total cost of the policy if purchased without retail premium finance;

   2. (b)

      the total cost of the policy with retail premium finance including costs of, or associated with, the retail premium finance; and

   3. (c)

      any difference in the costs in (a) and (b),

      alongside each other;

2. (2)

   a description that the use of retail premium finance arrangements will be more expensive for the customer compared to paying for the policy upfront;

3. (3)

   details of any difference between the duration of the policy and that of the retail premium finance; and

4. (4)

   where the price information is presented on any basis other than annually, an explanation alongside that information of any difference between the total price to be paid by the customer when buying with or without retail premium finance.

2The information in ICOBS 6A.5.2R must be communicated:

1. (1)

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

2. (2)

   in accordance with ICOBS 4.1A.

A firm must not propose or arrange the use of any particular retail premium finance where that would be inconsistent with the firm’s obligations in the FCA Handbook, including the customer’s best interest rule, SYSC 19F.2 or CONC.

1This section applies in relation to all general insurance contracts entered into with consumers which have an automatic renewal feature except for:

1. (1)

   private health or medical insurance; and

2. (2)

   pet insurance.

A firm must provide a consumer with easy and accessible methods for cancelling the automatic renewal feature in the consumer’s contract.

1. (1)

   The methods provided by a firm in accordance with ICOBS 6A.6.3R must include at least all the methods by which a consumer is able to purchase a new policy with the firm.

2. (2)

   A firm must consider the needs of its customers when determining what cancellation methods it provides.

A firm must allow the consumer to exercise their right to cancel the automatic renewal feature:

1. (1)

   at the time the consumer purchases the policy and at any time during the duration of the policy; and

2. (2)

   free of charge.