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MIPRU 5.1 Application and purpose

Application

MIPRU 5.1.1 R RP

2This chapter applies to a firm with a Part IV permission to carry on:

  1. (1)

    insurance business; or

  2. (2)

    mortgage lending;

  3. (3)

    and which uses, or proposes to use, the services of another person consisting of:

    1. (a)

      insurance mediation; or

    2. (b)

      insurance mediation activity; or

    3. (c)

      mortgage mediation activity.

Purpose

MIPRU 5.1.2 G RP

The purpose of this chapter is to implement article 3.6 of the Insurance Mediation Directive in relation to insurance undertakings. The provisions of this chapter have been extended to mortgage lenders in relation to insurance mediation activity, and to insurance undertakings and mortgage lenders in relation to mortgage mediation activity, to ensure that firms using these services are treated in the same way and to ensure that clients have the same protection. To avoid the loss of protection where an intermediary itself uses the services of an unauthorised person, this chapter also ensures that each person in the chain of those providing services is authorised.

MIPRU 5.1.3 G

This chapter supports the more general duties in Principles 2 and 3, and the relevant rule in the Senior Management Arrangements, Systems and Controls sourcebook (see SYSC 3.1.1 R).

MIPRU 5.2 Use of intermediaries

MIPRU 5.2.1 R RP

A firm must not use, or propose to use, the services of another person consisting of:

  1. (1)

    insurance mediation; or

  2. (2)

    insurance mediation activity; or

  3. (3)

    mortgage mediation activity;

unless two conditions are satisfied.

[Note: Article 3(6) of the IMD]

MIPRU 5.2.2 R RP

The first condition is that the person, in relation to the activity:

  1. (1)

    has permission; or

  2. (2)

    is an exempt person; or

  3. (3)

    is an exempt professional firm; or

  4. (4)

    is registered in another EEA State for the purposes of the IMD; or

  5. (5)

    in relation to insurance mediation activity, is not carrying this activity on in the EEA; or

  6. (6)

    in relation to mortgage mediation activity, is not carrying this activity on in the United Kingdom.

[Note: Article 3(6) of the IMD]

MIPRU 5.2.3 E RP
  1. (1)

    A firm should:

    1. (a)

      before using the services of the intermediary, check:

      1. (i)

        the FSA Register; or

      2. (ii)

        in relation to insurance mediation carried on by an EEA firm, the register of its Home State regulator;

      for the status of the

      person

      ; and

    2. (b)

      use the services of that person only if the relevant register indicates that the person is registered for that purpose.

  2. (2)
    1. (a)

      Checking the FSA Register before using the services of the intermediary and using the services of that person only if the FSA Register indicates that the person is registered for that purpose may be relied on as tending to establish that:

      1. (i)

        the person, in relation to the activity, has permission; or

      2. (ii)

        the person, in relation to insurance mediation activity, also is an exempt person or an authorised professional firm.

    2. (b)

      In relation to insurance mediation carried on by an EEA firm, checking the register of the firm'sHome State regulator and using the services of the EEA firm only if the register indicates that the firm is registered for that purpose may be relied on as tending to establish that the firm is registered for the purposes of the IMD.

MIPRU 5.2.4 R

The second condition is that the firm takes all reasonable steps to ensure that the person that it uses in relation to the activity, is not, directly or indirectly, carrying out the activity as a consequence of the activities of another person which:

  1. (1)

    contravene section 19 of the Act (The general prohibition); or

  2. (2)

    in the case of activities provided from an establishment in an EEA State, contravene the IMD registration requirements.

[Note: Article 3(6) of the IMD]

MIPRU 5.2.5 R

In order to comply with the second condition, a firm may rely on a confirmation provided by the other person in writing if:

  1. (1)

    the confirmation is provided by a person that satisfies the first condition;

  2. (2)

    the firm checked that this is the case; and

  3. (3)

    the firm is not aware that the confirmation is inaccurate and has no grounds for reasonably being aware that the confirmation is inaccurate.

MIPRU 5.2.6 G RP

The FSA Register can be accessed through the FSA website under the link www.fsa.gov.uk/register/home.do