ICOBS TP 1 Transitional Provisions

Consolidated Motor Insurance Directive 3

1

R

In relation to a claim by an injured party received by a motor vehicle liability insurer or its claims representative on or before 10 June 2007, the motor vehicle liability claims handling rules (see ICOBS 8.2.6 R to ICOBS 8.2.11 G) only apply if the claim results from an accident occurring in an EEA State other than the injured party's EEA State of residence which was caused by the use of a vehicle insured through an establishment in, and normally based in, an EEA State other than the injured party'sEEA State of residence.

Initial disclosure document

2

R

A firm may use the Key facts logo on a document that meets the requirements for an initial disclosure document except that it includes the sentence "It requires us to give you this document" in section 1 of the document. This rule applies until 5 January 2009.2

3

Expired2

4

Expired22

5

Expired2

Series of events

16

R

If, for a connected travel insurance intermediary, the application of any provision in this sourcebook is dependent on the occurrence of a series of events, the provision applies with respect to the events that occur on or after 1 January 2009.4

4 Employers' liability insurance: disclosure by insurers

47

R

For the purposes of ICOBS 8.4.6 R a firm falling within ICOBS 8.4.1R (2) at 6 March 2011 must ensure that the notification is:

(1)

valid as at a date no earlier than 6 March 2011; and,

(2)

submitted to the FSA no later than 6 April 2011.

48

R

(1)

For the purposes of ICOBS 8.4.4R (1)(a), ICOBS 8.4.4R (2)(b)(ii) and ICOBS 8 Annex 1, and subject to TP 13:

(a)

a firm is not required to include information required by ICOBS 8 Annex 1.1.1 R (1) in relation to policies entered into or renewed before 1 April 2012 unless the firm holds that information;

(b)

a firm must make available in accordance with ICOBS 8.4.7 R the information required by ICOBS 8 Annex 1.1.1 R (1) and (2) no later than three months from the date of entry, renewal or making of the claim;

(c)

a firm is not required to comply with ICOBS 8 Annex 1 Part 2 before 1 April 2011; and

(d)

notwithstanding (a), a firm is not required to include information relating to either the HMRC Employer Reference Number or to all other employers, other than the principal employer policyholder, covered by the policy, in relation to policies entered into, renewed or claims made before 1 April 2012.

(2)

For the purposes of ICOBS 8.4.4R (3)(a) a firm required to produce an employers' liability register under ICOBS 8.4.4R (1)(a) must obtain and submit to the FSA5 a director's certificate and a report prepared by an auditor required by ICOBS 8.4.4R (1)(c)5:

(b)

by 1 August 52012.

TP 8R(1) applies until 1 April 2012 and TP 8R(2) applies until 1 August 52012.

8A5

R

For the purposes of the director's certificate required under ICOBS 8.4.4R (1)(b) a firm will be deemed to have complied with ICOBS 8.4.4R (1)(b) to the extent that:

(1)

the director's certificate states that the employers' liability register as at 1 April 2012 has been properly prepared in accordance with ICOBS 8.4; and

(2)

the director has made the statement in (1) on the basis that the firm in preparing the register has been materially compliant (as described in ICOBS 8.4.4R (1A)(a)) with the requirements in ICOBS 8.4.4R (1)(b).

TP 8AR applies until 1 August 2012.5

8B5

R

For the purposes of the report prepared by an auditor required under ICOBS 8.4.4R (1)(c):

(1)

a firm will not be regarded as having breached ICOBS 8.4.4R (1)(c)if the firm has obtained and submitted to the FSA an independent assurance report addressing the accuracy and completeness of the employers' liability register following discussions with its auditors as to the form and content of the report, even if that report does not comply with ICOBS 8.4.4C R;

(2)

notwithstanding (1), a firm will be deemed to have complied with ICOBS 8.4.4R (1)(c) to the extent that the report obtained and submitted includes a detailed account of the procedures performed and the results of those procedures including, as a minimum:

(a)

a description of the underlying records from which the register is extracted;

(b)

a description, and the results, of the tests aimed at addressing the risk that the register is not completely and accurately compiled from data held on the firm's underlying records, and of the method of selecting the sample and the rationale for its being representative, including the following:

(i)

a reconciliation of the number of, and the identity of, policies for which information is included in the register against the number of, and the identity of, relevant policies for which details are contained in the underlying records and testing reconciliations to ensure that reconciling items are explained and appropriate;

(ii)

analysis of a representative sample of relevant employers liability claims made to the firm to ensure claims made have been entered onto the register; and

(iii)

analysis of a representative sample of policies in relation to which information appears on the register to ensure that all required information is included and that the included information is accurate compared to the information contained in the underlying records;

(c)

for the purposes of (b)(ii) and (iii), unless (d) applies, the firm must adopt the following approach to determining a representative sample in relation to each set of claims made, or policies, for which the same systems and controls are used in producing information for the register:

(i)

for each set of claims made or policies, a sample may be regarded as representative if the ratio of the minimum number in the sample to 25 is equal to the ratio of the square root of the total number of claims made or policies within the set to the square root of 1000, subject to a minimum of 10 policies or claims made; and

(ii)

for sets where the information required to be placed on the register relates to fewer than 10 policies, the sample may be regarded as representative if it includes all of those policies;

(d)

where the firm and the auditor consider that the approach to determining a representative sample set out in (c)(i) to (iii) are inappropriate having regard to the firm's particular circumstances, the report must set out the reasons for selecting a different representative sample by reference to the methods set out in (c); and

(e)

any other procedures agreed between the firm and the auditor as deemed necessary to be carried out by the auditor to test the extraction of information from underlying records by the firm for the purposes of ICOBS 8.4.4R (1)(a) tailored as appropriate to correspond to the firm's particular circumstances and the results of those procedures.

TP 8BR(1) applies until 1 August 2012.

TP 8BR(2) applies until 1 August 2012 for all firms, and thereafter until 1 August 2014 or, if earlier, the date upon which the firm first obtains a director's certificate which is not a qualified director's certificate.

8C5

G

The requirement set out in 8BR(2) is for what is commonly referred to by auditors as 'agreed upon procedures' under which the auditor is not required to provide an opinion or express assurance. All firms will be able to provide reports based on 'agreed upon procedures', instead of a limited assurance engagement, up until 1 August 2012. After that only firms which obtain qualified director's certificates will be able to use agreed upon procedures, and only until (and including) 1 August 2014, or, if earlier, the date upon which they first obtained a non-qualified director's certificate.

49

G

The effect of TP 8R(1) and ICOBS 8 Annex 1.1.1 R is that from 1 April 2011 until 1 April 2012, a firm is required to include in its employers' liability register the information required by the form in ICOBS 8 Annex 1.1.2 R relating to policies entered into, renewed or in respect of which a claim is made (subject to TP 13 below), but only to the extent that the firm has that information (with the exception of the HMRC Employer Reference Number and information relating to all employers covered by the policy, other than the principal employer policyholder, where information is only required in relation to policies entered into, renewed or claims made on or after 1 April 2012). The firm has a maximum of three months to make the information available from the date of entry, renewal or making of claim (subject to TP 13 below). From 1 April 2012 firms will need to include all the information in the form in ICOBS 8 Annex 1.1.2 R for policies entered or renewed on or after that date. Firms will continue to be required to include only information that the firm holds for policies in relation to which a claim is made (subject to TP 13 below) on or after 1 April 2012 (unless those policies were also entered into or renewed by the firm on or after 1 April 2012).

59A

R

(1)

For the purposes of ICOBS 8.4.4R (1)(a), to the extent that a firm is unable to include information required under ICOBS 8.4.4R (2)(b)(ii) solely because of a failure by a third party outside the firm's control, then provided that the firm has used, and continues to use, best endeavours to obtain that information, other than refusing to provide cover to an employer solely because it has not provided the information requested, the firm will be deemed to comply with the requirements in ICOBS 8.4.4R (2)(b)(ii) and the corresponding parts of ICOBS 8 Annex 1.

(2)

For the purposes of ICOBS 8.4.4R (1)(b) and (1)(c), a firm must treat references to compliance with ICOBS 8.4.4R (1)(a), ICOBS 8.4.4R (2) and ICOBS 8 Annex 1 as if TP 9AR did not apply.

59B

G

The effect of TP 9AR(1) is that a firm will not be in breach of the requirements to include relevant information on its register to the extent that it is unable to obtain that information from third parties over which it does not exercise control. However, in order to be able to rely on this provision the firm will need to be able to demonstrate that it has used its best endeavours to obtain the information from the third party over the relevant time period and continues to do so, other than by refusing to provide cover to that employer solely for failure to provide relevant information. The effect of TP 9AR(2) is that even though the firm may not be regarded as being in breach of the underlying requirements in ICOBS 8.4.4R (1)(a), the director's certificate and report prepared by an auditor will need to be addressed at the level of compliance of the register as if TP 9AR(1) did not provide any transitional relief from the firm being in breach.

5TP 9AR(1) and (2) and 9BG apply until 1 April 2013.

410

R

For the purposes of ICOBS 8.4.4R (2)(a), for a firm required to produce an employers' liability register under ICOBS 8.4.4R (1)(a) from 1 April 2011, the date of the initial version of the register must be 1 April 2011.

This rule applies until 1 April 2012.

10A5

R

For the purposes of ICOBS 8.4.6A R, if, as at 31 March 2012, a firm has obtained a waiver having the same effect as ICOBS 8 Annex 1.1.1B R, it must notify the FSA up to one month after, instead of before, the date upon which it first seeks to rely on ICOBS 8 Annex 1.1.1B R.

411

E

For the purposes of ICOBS 8.4.8 E, a public statement by a tracing office, approved by the directors of the tracing office, stating that the tracing office complies in all material respects with the requirements in ICOBS 8.4.9R (1) to (6) may be relied upon as tending to establish that a firm has satisfied the requirements to use a tracing office satisfying the conditions in ICOBS 8.4.9R (1) to (6).

This rule applies until 1 April 2012.

412

R

For the purposes of the condition referred to in ICOBS 8.4.9R (7), until a tracing office publishes its first annual report, the condition will be satisfied if the tracing office has issued a public statement, approved by the directors of the tracing office, stating that the tracing office complies in all material respects with the requirements in ICOBS 8.4.9R (1) to (6).

413

R

For the purposes of ICOBS 8.4.11R (2)(a), ICOBS 8.4.11R (2)(b), ICOBS 8.4.12A R5, ICOBS 8 Annex 1, TP 8,TP 8B5 and TP 9, in relation to references to claims made in relation to policies:

(1)

for claims received by a firm prior to 1 April 2011 which have not been settled as at 1 April 2011, those claims must be treated, for the purposes of the above rules, as having been made on or after 1 April 2011, and for the purposes of the above rules, the firm must include information in the form in ICOBS 8 Annex 1.1.2 R, in accordance with and including the notes, held by the firm (with the exception of information within TP 8R(1)(d) until 1 April 2012) within three months of the date upon which the claim was settled, on or after 1 April 2011; and

(2)

if, as at 1 April 2011, a firm's systems record5 claims by reference to the date the claim was created in the firm's systems or the date upon which it was settled, then, notwithstanding ICOBS 8.4.12A R,5 that firm may treat references to the date that a claim was made as a reference to the date that the claim was created in the firm's systems, or if applicable to the firm, the date that the claim was settled.

TP 13R(2) applies until 1 April 2013.5