PERG 5.14 Exemptions

Professional firms (broadly firms of solicitors, accountants and actuaries) may carry on insurance distribution activities3 in the course of their professional activities. Exempt professional firms carrying on insurance distribution activities3 may continue to be able to use the Part XX exemption to avoid any need for authorisation. PROF 2 (Status of exempt professional firm) contains guidance on the Part XX exemption. They will, however, need to be shown on the Financial Services Register as carrying on insurance distribution activities3, in order to benefit from this exemption. The task of registration is the responsibility of the designated professional bodies who will need to inform the FCA both of member firms carrying on insurance distribution activities3 and individuals within firms' management responsible for these activities.

Professional firms with practices that involve acting for claimants in litigation against insurance undertakings are likely to be carrying on the regulated activity of assisting in the administration and performance of a contract of insurance. Exempt professional firms whose practices contain a material element of such activity should consider whether they can continue to take advantage of the Part XX exemption to avoid any need for authorisation, having regard to the relevant provisions of the Act, in particular section 327 (Exemption from the general prohibition) and the guidance in PROF 2.1.14 G (Exempt regulated activities).

Professional firms should be aware of the disapplication of the exclusions for trustees (article 66) and activities carried on in the course of a profession or non-investment business (article 67) outlined in PERG 5.11.7 G (Exclusions disapplied in connection with insurance distribution3) where their activities would amount to insurance distribution3. Where they do not, they will still be able to rely upon article 67. Otherwise, the Non-Exempt Activities Order3 imposes limitations on the extent to which professional firms can give advice to individuals. In particular, a professional firm cannot make a recommendation3 to a private client to3 buy a life policy, unless it3 is endorsing a corresponding recommendation given to the client. The recommendation it3 endorses must be one given by an authorised person permitted to advise on life policies, or an exempt person for these purposes. No such restrictions apply, however, in relation to contracts of insurance other than life policies.

As indicated in PERG 5.6.8 G, the article 72C exclusion (Provision of information on an incidental basis) is potentially available to unauthorised professional firms including exempt professional firms. This may be relevant to professional firms arranging contracts of insurance for clients on an individual basis.

In addition to certain named persons exempted by the Exemption Order from the need to obtain authorisation, the following bodies are exempt in relation to insurance distribution activities3 that do not relate to life policies:

1. (1)

   [deleted]2

   2
2. (2)

   registered social landlords in England and Wales within the meaning of Part I of the Housing Act 1996 but not their subsidiaries;

3. (3)

   registered social landlords in Scotland within the meaning of the Housing (Scotland) Act 2001 but not their subsidiaries;

4. (4)

   the Office of Tenants and Social Landlords (known as the Tenant Services Authority);

   1
5. (4A)

   1the Homes and Communities Agency;

6. (5)

   Scottish Homes; and

7. (6)

   The Northern Ireland Housing Executive.