Related provisions for PERG 6.4.4

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PERG 5.4.6GRP
Some typical examples of where the business test is unlikely to be satisfied, assuming that there is no direct financial benefit to the arranger, include:(1) arrangements which are carried out by a person for himself, or for members of his family;(2) where employers provide insurance benefits for staff; and(3) where affinity groups or clubs set up insurance benefits for members.
PERG 5.4.8GRP

Table: Carrying on insurance mediation activities 'for remuneration' and 'by way of business'

Carrying on insurance mediation activities 'for remuneration' and 'by way of business'

'For remuneration'

Factor

Indicators that P does not carry on activities "for remuneration"

Indicators that P does carry on activities "for remuneration"

Direct remuneration, whether received from the customer or the insurer/broker (cash or benefits in kind such as tickets to the opera, a reduction in other insurance premiums, a remission of a debt or any other benefit capable of being measured in money's worth)

P does not receive any direct remuneration specifically identified as a reward for

his carrying on insurance mediation activities.

P receives direct remuneration specifically identified as being a reward for

his carrying on insurance mediation activities.

Indirect remuneration (such as any form of economic benefit as may be explicitly or implicitly agreed between P and the insurer/broker or P's customer – including, for example, through the acceptance of P's terms and conditions or mutual recognition of the economic benefit that is likely to accrue to P). An indirect economic benefit can include expectation of making a profit of some kind as a result of carrying on insurance mediation activities as part of other services.

P does not obtain any form of indirect remuneration through an economic benefit other than one which is not likely to have a material effect on P's ability to make a profit from his other activities.

P obtains an economic benefit that: (a) is explicitly or implicitly agreed between P and the insurer/broker or P's customer; and (b) has the potential to go beyond mere cost recovery through fees or other benefits received for providing a package of services that includes insurance mediation activities but where no particular part of the fees is attributable to insurance mediation activities. This could include where insurance mediation activities are likely to:

  • play a material part in the success of P's other business activities or in P's ability to make a profit from them; or
  • provide P with a materially increased opportunity to provide other goods or services; or
  • be a major selling point for P's other business activities; or
  • be essential for P to provide other goods or services.

P charges his customers a greater amount for other goods or services than would be the case if P were not also carrying on insurance mediation activities for those customers and this:

  • is explicitly or implicitly agreed between P and the insurer/broker or P's customer; and
  • has the potential to go beyond mere cost recovery.

Recovery of costs

P receives no benefits of any kind (direct or indirect) in respect of his insurance mediation activities beyond the reimbursement of his actual costs incurred in carrying on the activity (including receipt by P of a sum equal to the insurance premium that P is to pass on to the insurer or broker).

P receives benefits of any kind (direct or indirect) in respect of his insurance mediation activities which go beyond the reimbursement of his actual costs incurred in carrying on the activity.

'By way of business'

Factor

Indicators that P does not carry on activities "by way of business"

Indicators that P does carry on activities "by way of business"

Regularity/ frequency

Involvement is one-off or infrequent (for instance, once or twice a year) provided that the transaction(s) is not of such size and importance that it is essential to the success of P's other business activities.

Transactions do not result from formal arrangements (for instance, occasional involvement purely as a result of an unsolicited approach).

Involvement is frequent (for instance, once a week).

Involvement is infrequent but the transactions are of such size or importance that they are essential to the success of P's other business activities.

P has formal arrangements which envisage transactions taking place on a regular basis over time (whether or not such transactions turn out in practice to be regular).

Holding out

P does not hold himself out as providing a professional service that includes insurance mediation activities (by professional is meant not the services of a layman).

P holds himself out as providing a professional service that includes insurance mediation activities.

Relevance to other activities/ business

Insurance mediation activities:

  • have no relevance to P‘s other activities; or
  • have some relevance but could easily be ceased without causing P any difficulty in carrying on his main activities; or
  • would be unlikely to result in a material reduction in income from P‘s main activities if ceased

Insurance mediation activities:

  • are essential to P in carrying on his main activities; or
  • would cause a material disruption to P carrying on his main activities if ceased; or
  • would be likely to reduce P‘s income by a material amount.

Commercial benefit

P receives no direct or indirect pecuniary or economic benefit.

P is a layman and acting in that capacity.

P would not obtain materially less income from his main activities if they did not include

insurance mediation activities.

P receives a direct or indirect pecuniary or economic benefit from carrying on insurance mediation activities – such as a fee, a benefit in kind or the likelihood of materially enhanced sales of other goods or services that P provides.

P would obtain materially less income from his main activities if they did not include insurance mediation activities.
CASS 5.3.2RRP
A firm (other than a firm acting in accordance with CASS 5.4) receives and holds client money as trustee (or in Scotland as agent) on the following terms:(1) for the purposes of and on the terms of CASS 5.3, CASS 5.5 and the client money (insurance) distribution rules;(2) subject to (4),1 for the clients (other than clients which are insurance undertakings when acting as such)1 for whom that money is held, according to their respective interests in it;(3) after all valid claims
CASS 5.3.3GRP
(1) A firm which holds client money can discharge its obligation to ensure adequate protection for its clients in respect of such money by complying with CASS 5.3 which provides for such money to be held by the firm on the terms of a trust imposed by the rules.(2) The trust imposed by CASS 5.3 is limited to a trust in respect of client money which a firm receives and holds. The consequential and supplementary requirements in CASS 5.5 are designed to secure the proper segregation
PERG 5.16.2GRP
Text of article 2.3 of the Insurance Mediation Directive"'Insurance mediation' means the activities of introducing, proposing or carrying out other work preparatory to the conclusion of contracts of insurance, or of concluding such contracts, or of assisting in the administration and performance of such contracts, in particular in the event of a claim.These activities when undertaken by an insurance undertaking or an employee of an insurance undertaking who is acting under the
PERG 6.5.4GRP
The FSA will apply the following principles of construction to determine whether a contract is a contract of insurance.(1) In applying the description in PERG 6.3.4 G, more weight attaches to the substance of the contract, than to the form of the contract. The form of the contract is relevant (see PERG 6.6.8 G (3) and (4)) but not decisive of whether a contract is a contract of insurance: Fuji Finance Inc. v. Aetna Life Insurance Co. Ltd [1997] Ch. 173 (C.A.).(2) In particular,
PERG 5.8.4GRP
Advice about contracts of insurance will come within the regulated activity in article 53 of the Regulated Activities Order only if it relates to a particular contract of insurance. So, generic or general advice will not fall under article 53. In particular:(1) advice would come within article 53 if it took the form of a recommendation that a person should buy the ABC Insurers motor insurance;(2) advice would not relate to a particular contract if it consists of a recommendation
PERG 5.8.14GRP
Generally speaking, advice on the merits of using a particular insurance undertaking, broker or adviser in their capacity as such, does not amount to advice for the purpose of article 53. It is not advice on the merits of buying or selling a particular contract of insurance (unless, in the circumstances, the advice amounts to an implied recommendation of a particular policy).
PERG 5.11.1GRP
This part of the guidance deals with:(1) exclusions which are disapplied where the regulated activity relates to contracts of insurance;(2) exclusions which are disapplied where a person carries on insurance mediation; and(3) the following exclusions applying to more than one regulated activity:(a) activities carried on in the course of a profession or non-investment business (article 67 (Activities carried on in the course of a profession or non-investment business));(b) activities
PERG 5.11.5GRP
Insurance undertakings are referred to PRU 9.4 (Insurance undertakings and mortgage lenders using insurance or mortgage mediation services) as regards their obligations relating to the use of intermediaries generally.
SUP 6.4.12GRP
The FSA will usually require the report in SUP 6.4.9 G to be signed by a director or other officer with authority to bind the firm. It may include confirmations from the firm that, in relation to business carried on under its Part IV permission, it has:(1) ceased carrying on all regulated activities;(2) properly disbursed funds in its client bank accounts and closed those accounts;(3) discharged all insurance or deposit liabilities; and(4) properly transferred all investments,
SUP 6.4.17GRP
If a firm is transferring its business, the FSA may require a professional opinion in respect of certain aspects of the transfer. For example, the FSA may require a legal opinion on the validity of arrangements to transfer regulated activities, client money, client deposits, custody assets or any other property belonging to clients, to another authorised person. Alternatively, an auditor or reporting accountant may be requested to verify that a transfer has been properly accounted
SUP 16.8.9GRP
1Life policies and stakeholder pensions falling within SUP 16.8.8 R (2) (c) are those which have been transferred from another firm, for example under an insurance business transfer scheme under Part VIIof the Act (Control of Business Transfers).
MCOB 7.6.17RRP
(1) Where the further advance for which the customer has applied is in the form of an annual insurance premium secured by a first legal charge, a firm:(a) may, instead of providing an illustration in accordance with MCOB 7.6.7 R, provide confirmation of the matters required by MCOB 7.6.5 R; and(b) where (a) applies use the following text:"Your annual insurance premium has been/will be added to your mortgage account [unless you pay it by dd/mm/yy]. If you choose to pay it in full
PERG 2.5.6GRP
The Insurance Mediation Directive has in part been implemented through various amendments to the Regulated Activities Order. These include article 4(4A) (Specified activities: general) which precludes a person who, for remuneration, takes up or pursues insurance mediation or reinsurance mediation in relation to a risk or commitment situated in an EEA State from making use of certain exclusions. In other cases, some of the exclusions provided in relation to particular regulated
PERG 5.1.6GRP
The purpose of this guidance is to help persons consider whether they need authorisation or a variation of their Part IV permission. Businesses new to regulation who act only as introducers of insurance business are directed in particular to PERG 5.6.2 G(article 25(1): arranging (bringing about) deals in investments) to PERG 5.6.9 G (Exclusion: Article 72C (Provision of information on an incidental basis)) and PERG 5.15.6 G (Flow chart: Introducers) to help consider whether they
MCOB 9.3.12RRP
In meeting a requestunder MCOB 5.5.1 R(2)(c), the firm must not delay the provision of the illustration by requesting information other than:(1) the information necessary to personalise the illustration in accordance with MCOB 9.4.6 R, if the firm does not already know it;(2) where the firm acts in accordance with MCOB 5.5.11 R (2), such information as is necessary to ascertain whether or not the contract will be a regulated lifetime mortgage contract;(3) where the interest rates,