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MIPRU 2.3 Knowledge, ability and good repute

MIPRU 2.3.1RRP

A firm3 (other than a connected travel insurance intermediary)4 must establish on reasonable grounds that:

3
  1. (1)

    a reasonable proportion of the persons within its management structure who are responsible for insurance mediation activity; and

  2. (2)

    all other persons directly involved in its insurance mediation activity;

demonstrate the knowledge and ability necessary for the performance of their duties; and

  1. (3)

    all the persons in its management structure and any staff directly involved in insurance mediation activity are of good repute.

[Note: Article 4(1) and (2) of the Insurance Mediation Directive2]

2
MIPRU 2.3.2GRP

In determining a person's knowledge and ability, the firm should have regard to matters including, but not limited to, whether the :

  1. (1)

    has demonstrated by experience and training that he is able or1 will be able to perform his duties related to the firm's insurance mediation activity; and

    1
  2. (2)

    satisfies the relevant requirements in1 the FCA's7 Training and Competence sourcebook and the Senior Management Arrangements, Systems and Controls sourcebook1.

    17
MIPRU 2.3.3RRP

In considering a person's repute the firm must ensure that the person:

  1. (1)

    has not been convicted of any serious criminal offences linked to crimes against property or other crimes related to financial activities (other than spent convictions under the Rehabilitation of Offenders Act 1974 or any other national equivalent); and

  2. (2)

    has not been adjudged bankrupt (unless the bankruptcy has been discharged);

under the law of any part of the United Kingdom or under the law of a country or territory outside the United Kingdom.

[Note: Article 4(2) of the Insurance Mediation Directive2]

2
MIPRU 2.3.4GRP

The firm should give particular consideration to offences of dishonesty, fraud, financial crime or other offences under legislation relating to banking and financial services, companies, insurance and consumer protection.

MIPRU 2.3.5GRP

Firms are reminded that Principle 3 requires firms to take reasonable care to organise and control their affairs responsibly and effectively. Principle 3 is amplified by the rule which requires firms to take reasonable care to establish and maintain such systems and controls as are appropriate to its business (SYSC 3.1.1 R and SYSC 4.1.1 R).5 A firm's systems and controls should enable it to satisfy itself of the suitability of anyone who acts for it (SYSC 3.2.13 G and SYSC 5.1.2 G).5 This includes the assessment of an individual's honesty and competence. In addition, the competent employees rule (SYSC 3.1.6 R and SYSC 5.1.1 R)5 sets out a high-level competence requirement which every firm should follow.1

1