1An insurer must:

1. (1)

   handle claims promptly and fairly;

2. (2)

   provide reasonable guidance to help a policyholder make a claim and appropriate information on its progress;

3. (3)

   not unreasonably reject a claim (including by terminating or avoiding a policy); and

4. (4)

   settle claims promptly once settlement terms are agreed.

For contracts entered into or variations agreed before 1 August 2017, a3 rejection of a consumerpolicyholder's claim is unreasonable, except where there is evidence of fraud, if it is :2

1. (1)

   in relation to contracts entered into or variations agreed on or before 5 April 2013, for:2

   1. (a)

      non-disclosure of a fact material to the risk which the policyholder could not reasonably be expected to have disclosed; or2

   2. (b)

      non-negligent misrepresentation of a fact material to the risk; or2

2. (2)

   in relation to contracts entered into or variations agreed on or after 6 April 2013, for misrepresentation by a customer and the misrepresentation is not a qualifying misrepresentation (see ICOBS 8.1.3R)3; or2

3. (3)

   for2 breach of warranty or condition unless the circumstances of the claim are connected to the breach and unless (for a pure protection contract):

   1. (a)

      under a ‘life of another’ contract, the warranty relates to a statement of fact concerning the life to be assured and, if the statement had been made by the life to be assured under an ‘own life’ contract, the insurer could have rejected the claim under this rule; or

   2. (b)

      the warranty is material to the risk and was drawn to the customer's attention before the conclusion of the contract.

3For contracts entered into or variations agreed on or after 1 August 2017, a rejection of a consumerpolicyholder's claim for breach of a condition or warranty (that is not subject to and within section 10 or 11 of the Insurance Act 2015) is unreasonable unless the circumstances of the claim are connected to the breach.

In this section,3 a “qualifying misrepresentation” is one made by a consumer before a consumer insurance contract was entered into or varied if:

1. (1)

   the consumer made the misrepresentation in breach of the duty set out in section 2(2) of the Consumer Insurance (Disclosure and Representations) Act 2012 to take reasonable care not to make a misrepresentation to the insurer; and

2. (2)

   the insurer shows that without the misrepresentation, that insurer would not have entered into the contract (or agreed to the variation) at all, or would have done so only on different terms.

[Note: section 4 of the Consumer Insurance (Disclosure and Representations) Act 2012.]

1. (1)

   This section applies to a motor vehicle liability insurer.

2. (2)

   The rules in this section relating to the appointment of claims representatives apply:2

   2
   1. (a)

      [deleted]3

      2
   2. (b)

      in relation to claims arising out of events occurring, and risks situated, in the United Kingdom, and covered by a firm operating from an establishment in the European Economic Area3.

      2
3. (3)

   The rules in this section relating to claims handling apply in respect of claims arising from any accident caused by a vehiclenormally based in the United Kingdom.

A firm operating from an establishment in the European Economic Area3 carrying on motor vehicle liability insurance business and covering UK risks 3must have a claims representative in the United Kingdom to deal with claims arising out of events occurring in the United Kingdom.

[Note: article 152 of the Solvency II Directive]

A firm must ensure that each claims representative:

1. (1)

   is responsible for handling and settling a claim by an injured party;

2. (2)

   is resident or established in the United Kingdom3;

3. (3)

   collects all information necessary in connection with the settlement of a claim and takes the measures necessary to negotiate its settlement;

4. (4)

   possesses sufficient powers to represent the firm in relation to an injured party and to meet an injured party's claim in full; and

5. (5)

   is capable of examining cases in the official language(s) of the United Kingdom3.

1. (1)

   A firm must notify to the Motor Insurers’ Information Centre3:

   1. (a)

      the name and address of the claims representative which they have appointed in the United Kingdom3;

      [Note: article 23(2) of the Consolidated Motor Insurance Directive]

   2. (b)

      the telephone number and effective date of appointment; and

   3. (c)

      any material change to information previously notified.

2. (2)

   Notification must be made within ten business days of an appointment or of a material change.

Within three months of the injured party presenting his claim for compensation:

1. (1)

   the firm of the person who caused the accident or its claims representative must make a reasoned offer of compensation in cases where liability is not contested and the damages have been quantified; or

2. (2)

   the firm to whom the claim for compensation has been addressed or its claims representative must provide a reasoned reply to the points made in the claim in cases where liability is denied or has not been clearly determined or the damages have not been fully quantified.

1. (1)

   If liability is initially denied, or not admitted, within three months of any subsequent admission of liability, the firm must (directly, or through a claims representative) make a reasoned offer of settlement, if, by that time, the relevant claim for damages has been fully quantified.

2. (2)

   If an injured party's claim for damages is not fully quantified when it is first made, within three months of the subsequent receipt of a fully quantified claim for damages, the firm must (directly, or through a claims representative) make a reasoned offer of damages, if liability is admitted at that time.

A claim for damages will be fully quantified for the purpose of this section when the injured party provides written evidence which substantiates or supports the amounts claimed.

1. (1)

   If the firm, or its claims representative, does not make an offer as required by this section, the firm must pay simple interest on the amount of compensation offered by it or awarded by the court to the injured party, unless interest is awarded by any tribunal.

2. (2)

   The interest calculation period begins when the offer should have been made and ends when the compensation is paid to the injured party, or his authorised representative.

3. (3)

   The interest rate is the Bank of England's base rate (from time to time), plus 4%.

A firm will be taken to have received a claim, or a fully quantified claim, for damages when the claim is delivered to it, or a claims representative, by any person by any method of delivery which is lawful in the firm's, or its claims representative's, respective State of residence or establishment.

1. (1)

   1The general application rule in ICOBS 1.1.1 R applies to this section subject to the modifications in (2).

2. (2)

   This section applies to:

   1. (a)

      any firm solely with respect to the activities of:

      1. (i)

         carrying out contracts of insurance; or

      2. (ii)

         managing the underwriting capacity of a Lloyd's syndicate as a managing agent at Lloyd's;

      in relation to general insurance contracts and, in either case, including business accepted under reinsurance to close.6

   2. (b)

      [deleted]6

3. (3)

   In this section references to:

   1. (a)

      an ‘employers’ liability register’ are to the employers’ liability register referred to in ICOBS 8.4.4R (1)(a);

   2. (b)

      a ‘director's certificate’ are to a2 statement complying with the requirements in SUP 16.23A5;

      22
   3. (c)

      employers' liability insurance include business accepted under reinsurance to close covering employers' liability insurance (including business that is only included as employers' liability insurance for the purposes of this section);2

      3
   4. (d)

      a ‘qualified director's certificate’ are to the statement complying with the requirements in SUP 16.23A.5R5; and32

      2
   5. (e)

      a ‘historical policy’ are to a United Kingdom commercial lines employers' liability insurancepolicy or other evidence of cover issued or renewed before 1 April 2011.3

1. (1)

   A firm carrying out contracts of insurance, or a managing agent managing insurance business, including in either case business accepted under reinsurance to close, which includes United Kingdom commercial lines employers' liability insurance, must:

   1. (a)

      produce an employers’ liability register complying with the requirements in (2) and ICOBS 8 Annex 1;

   2. (b)

      [deleted]5

   3. (c)

      [deleted]5

2. (1A)

   [deleted]5

3. (2)

   For the purposes of (1)(a) the employers’ liability register is required to:

   1. (a)

      include the date upon which the register was produced;

   2. (b)

      include a database which:

      1. (i)

         reliably stores information required by ICOBS 8 Annex 1;

      2. (ii)

         in relation to information required by ICOBS 8 Annex 1 1.1R(1), contains accurate information and, in relation to information required by ICOBS 8 Annex 1 1.1R(2), contains information which faithfully reproduces the information that the firm has; and

      3. (iii)

         has an effective search function which allows a person inputting data included on the register relating to a particular employer over a particular period to retrieve information on the register relating to a potential employers’ liability claim corresponding to that employer and period;

   3. (c)

      allow for requests for information or searches relating to a potential claim to be made by:

      1. (i)

         individuals with the potential claim, or their authorised representative, or

      2. (ii)

         any employer to whom the potential claim relates; or

      3. (iii)

         an insurer which is potentially jointly and severally liable with another firm in relation to the potential claim; or

      4. (iv)

         a relevant insurance intermediary acting for an insurer in (iii);

   4. (d)

      allow for requests by a tracing office which meets the conditions in ICOBS 8.4.9R relating to the use of information on the firm's register to the extent that the information is necessary, and used solely, to enable the tracing office to provide comprehensive searching facilities to its users; and

   5. (e)

      allow for responses to requests or searches in (c) to be provided without delay.

4. (3)

   [deleted]5

5. (4)

   For the purposes of (1):

   1. (a)

      United Kingdom commercial lines employers' liability insurance means commercial lines employers' liability insurance where both the employer’s business was or is carried on, and the employees’ course of employment was or is, in the United Kingdom; and

   2. (b)

      commercial lines business comprises contracts of insurance carried out in relation to persons whose employers' liability insurance relates to a business or profession they carry on.

A firm must:

1. (1)

   notify the FCA, within one month of falling within ICOBS 8.4.1R (2), as to whether or not it, or, if relevant, a member of the syndicates it manages, carries on business falling within ICOBS 8.4.4R (1) and, if it does, include in that notification:

   1. (a)

      details of the internet address of the firm or tracing office at which the employers’ liability register is made available;

   2. (b)

      the name of a contact person at the firm and their telephone number or postal address, or both; and

   3. (c)

      the period over which the firm or syndicate member provided cover under relevant policies or, if still continuing, the date that cover commenced; and

   4. (d)

      the firm's Firm Reference Number; and

2. (2)

   ensure that the notification in (1):

   1. (a)

      is approved and signed by a director of the firm; and

   2. (b)

      contains a statement that to the best of the director's knowledge the content of the notification is true and accurate.

2A firm with potential liability under an excess policy and which satisfies the requirements in ICOBS 8 Annex 1 1.1B R must notify the FCA before the date upon which it first seeks to rely upon that rule and ensure that the requirements of ICOBS 8.4.6R (2) are satisfied in respect of this notification.

1. (1)

   A firm must make available:

   1. (a)

      the information on the employers’ liability register either:

      1. (i)

         on the firm's website at the address notified to the FCA in ICOBS 8.4.6R (1); or

      2. (ii)

         by arranging for a tracing office which meets the conditions in ICOBS 8.4.9 R to make the information available on the tracing office’s website; and

   2. (b)

      the latest director's certificate prepared in accordance with SUP 16.23A.5R(1)5 and the latest report prepared by an auditor for the purposes of SUP 16.23A.6R(1)5, to a tracing office which has obtained information from the firm for the purposes of providing comprehensive tracing information, in accordance with ICOBS 8.4.4R (2)(d), provided that the tracing office has agreed with the firm not to disclose5 confidential information in the certificate and the report to third parties, save as required by law.2

      2
2. (2)

   If a firm arranges for a tracing office to make information available for the purposes of (1)(a)(ii) the firm must:

   1. (a)

      send to the tracing office copies of its latest director's certificate and report prepared by the firm's auditor provided that the tracing office has agreed with the firm not to disclosure confidential information in the certificate and the report to third parties, save as required by law;2

      2
   2. (b)

      maintain records of all the tracing information and copies of all documents it has provided to the tracing office;

   3. (c)

      retain all legal rights in relation to the ownership and use of the information and documents provided to the tracing office to enable the firm to provide that information or documentation to another tracing office or to make it available itself; and

   4. (d)

      send to the tracing office its Firm Reference Number.

The conditions referred to in ICOBS 8.4.4R (2)(d) and ICOBS 8.4.7R (1)(a)(ii) are that the tracing office is one which:

1. (1)

   maintains a database which:

   1. (a)

      accurately and reliably stores information submitted to it by firms for the purposes of complying with these rules;

   2. (b)

      has systems which can adequately keep it up to date in the light of new information provided by firms;

   3. (c)

      has an effective search function which allows a person inputting data included on the database relating to a particular employer over a particular period to retrieve information on the database relating to a potential employers’ liability claim corresponding to that employer and period;

2. (2)

   maintains adequate records of the director's certificates and reports prepared by an auditor2 sent to it by firms for the purposes of complying with these rules;

   2
3. (3)

   has effective arrangements for information security, information back up and business continuity and to prevent the misuse of data;

4. (4)

   accepts search requests in relation to information in (1) relating to a potential claim from:

   1. (a)

      individuals with the potential claim, or their authorised representative; or

   2. (b)

      the employer to whom the potential claim relates; or

   3. (c)

      an insurer which is potentially jointly and severally liable with another firm in relation to the potential claim; or

   4. (d)

      a relevant insurance intermediary acting for an insurer in (c);

5. (5)

   provides responses to requests in (4) without delay;

6. (6)

   has adequate arrangements for providing to a firm, upon request and without delay, a full copy of the information on the database that the firm has provided to it;

7. (7)

   includes in its published annual report:

   1. (a)

      a certificate from the directors of the tracing office stating whether the tracing office has complied with the requirements in (1) to (6) in relation to the period covered by the annual report; and

   2. (b)

      an independent report commissioned under a reasonable assurance engagement satisfying the requirement in ICOBS 8.4.9A R,2 addressing the accuracy and completeness of the database, prepared by an auditor satisfying the requirements of SUP 3.4 and SUP 3.8.5 R to SUP 3.8.6 R, and addressed to the directors of the tracing office; and

      2
8. (8)

   provides to a firm making use of the tracing office for the purposes of ICOBS 8.4.7R (1)(a)(ii):

   1. (a)

      a copy of its annual report promptly after publication; and

   2. (b)

      upon request and without delay a full copy of the information on the database that the firm has provided to it.

2The requirement referred to in ICOBS 8.4.9R (7)(b) is that the report must include an opinion from the auditor confirming whether, in all material respects, the tracing office maintains a database which accurately and reliably stores information submitted to it by firms for the purpose of complying with relevant requirements in ICOBS 8.4 and that it has systems which can adequately keep it up to date in the light of new information provided by firms.

1. (1)

   A firm must notify the FCA:

   1. (a)

      of any information provided to the FCA under ICOBS 8.4.6 R or ICOBS 8.4.6A R2 which ceases to be true or accurate; and

   2. (b)

      of the new position, in accordance with the notification requirements in ICOBS 8.4.6 R;

   within one month of the change.

2. (2)

   A firm producing an employers’ liability register must:

   1. (a)

      update the register with any new or more accurate information falling within ICOBS 8 Annex 1:

      1. (i)

         by virtue of the entry into or renewal of, or of a claim made in relation to, a policy, as required by ICOBS 8 Annex 1 Part 1; and

      2. (ii)

         in all other cases, by virtue of the firm having received that new or more accurate information;

   2. (b)

      make the updated information in (a) available, in accordance with ICOBS 8.4.7 R, no later than:

      1. (i)

         in relation to new or more accurate information arising out of the entry into or renewal of, or a claim made in relation to, a policy, three months from the date of entry, renewal or the date upon which the claim was made; and

      2. (ii)

         in all other cases, three months from the date upon which the firm received the new or more accurate information;

   3. (c)

      update the register, no less frequently than once every three months, and include the date that the register was updated and a statement that the register may be relied on as up-to-date as at a date three months prior to the date upon which the register was updated, or such later date as applicable to the firm;5

   4. 5

   5. 5

1. (1)

   2For the purposes of ICOBS 8.4.11R (2)(a), 8.4.11R (2)(b) and ICOBS 8 Annex 1 a claim is deemed to be made in relation to a policy at the date on which the firm establishes, or otherwise accepts, that it has provided relevant cover under the policy, and is therefore potentially liable subject to the terms of the policy.

2. (2)

   A firm must use reasonable endeavours to establish whether it has provided relevant cover:

   1. (a)

      within three months of being notified of a potential claim; or

   2. (b)

      if that is not possible, as soon as is reasonably practicable thereafter.

The transferor in an insurance business transfer scheme must provide the transferee with the information and documents the transferor holds in compliance with ICOBS 8.4 in respect of the insurance business transferred.

3A firm with actual or potential liability for United Kingdom commercial lines employers' liability insurance claims must take reasonable steps to conduct effective searches of their records when they receive a request to carry out a search for a historical policy from persons falling into one of the categories in ICOBS 8.4.4R (2)(c) or a tracing office which meets the conditions in ICOBS 8.4.9 R.

3A firm must put in place a written policy for complying with ICOBS 8.4.14 R and operate in accordance with it. The policy must cover at least the following matters:

1. (1)

   details of where the firm's historical policies are held or are likely to be held (including details of records which are archived or stored off site);

2. (2)

   details of the different types of records to be searched by the firm, such as electronic files, paper files, and microfiche; and

3. (3)

   details of how the searches will be carried out, including a description of how and in what circumstances the firm may decide not to conduct a search.

1. (1)

   3When a firm receives a request under ICOBS 8.4.14 R, from a qualifying tracing office, it must provide a response, in writing, to the requestor within one month of receiving the request.

2. (2)

   This rule does not apply when the firm has conducted a search but no historical policies have been found.

3. (3)

   When a firm receives a request under ICOBS 8.4.14 R, other than from a qualifying tracing office, it must provide a response, in writing, to the requestor within two months of receiving the request in accordance with ICOBS 8.4.17 R.

1. (1)

   3Where a firm has established that a historical policy does exist, the response should confirm what cover was provided and set out any available information that is relevant to the request received.

2. (2)

   Where there is evidence to suggest that a historical policy does exist, but the firm is unable to confirm what cover was provided, the response should set out any information relevant to the request and describe the next steps (if any) the firm will take to continue the search.

3. (3)

   Subject to ICOBS 8.4.16R (2), where the firm has conducted a search, but no historical policies have been found, the response should set this out clearly and explain that reasonable steps were taken to conduct an effective search.