Related provisions for PERG 5.4.5

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To access the FCA Handbook Archive choose a date between 1 January 2001 and 31 December 2004 (From field only).

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 5.10.1GRP
It must be emphasised that activities which concern invitations to renew policies and the subsequent effecting of renewal of policies are likely to fall within insurance mediation activity. Those considering the need for authorisation or variation of their permissions will wish to consider whether a process of tacit renewal operates: that is, where a policyholder need take no action if he wishes to maintain his insurance cover by having his policy 'renewed'. This process will
SUP 6.3.11GRP
A firm with Part IV permission to carry on insurance business, which is applying for a variation of its Part IV permission to add further insurance activities or specified investments, will be required to submit particular information on its existing activities as part of its application. This includes the scheme of operations which is required to be submitted as part of the application pack (for further details on the scheme of operations, see SUP App 2 (Insurers: scheme of
SUP 6.3.12GRP
In applying to vary its Part IV permission to add categories of specified investments, in relation to insurance business, a firm carrying on insurance business will need to determine the classes of specified investments relating to effecting and carrying out contracts of insurance for which variation of Part IV permission will be necessary, having regard to whether certain classes of contract may qualify to be effected or carried out on an ancillary or supplementary basis (see
SUP 13.3.2BGRP
4An appointed representative appointed by a firm to carry on insurance mediation activity on its behalf may establish a branch in another EEA State under the Insurance Mediation Directive. In this case, the notice of intention in SUP 13.3.2 G (1) should be given to the FSA by the firm on behalf of the appointed representative.5
SUP 13.3.2CGRP
4An exempt professional firm which is included in the record of unauthorised persons carrying on insurance mediation activity maintained by the FSA under article 93 of the Regulated Activities Order may establish a branch in another EEA State under the Insurance Mediation Directive (see PROF 7.2).
PERG 2.10.5GRP
A person is exempt if he is an appointed representative of an authorised person. See SUP 12 (Appointed representatives). But where an appointed representative carries on insurance mediation or reinsurance mediation he will not be exempt unless he is included on the register kept by the FSA under article 93 of the Regulated Activities Order (Duty to maintain a record of unauthorised persons carrying on insurance mediation activities) (see PERG 5.13 (Appointed representatives
PERG 2.10.16GRP
A person carrying on regulated activities under the regime for members of the professions will be subject to rules made by the professional body designated by the Treasury. Such bodies are obliged to make rules governing the carrying on by their members of those regulated activities that they are able to carry on without authorisation under the Act. Where such a person is carrying on insurance mediation or reinsurance mediation, he must also be included on the register kept by
PERG 5.6.5GRP
The Regulated Activities Order provides an important potential exclusion, however, for persons whose principal business is other than insurance mediation activities.
PERG 5.6.10GRP
Article 27 of the Regulated Activities Order (Enabling parties to communicate) contains an exclusion that applies to arrangements which might otherwise bring within article 25(2) those who merely provide the means by which one party to a transaction (or potential transaction) is able to communicate with other parties. Simply providing the means by which parties to a transaction (or potential transaction) are able to communicate with each other is excluded from article 25(2) only.
PERG 5.15.1GRP
This flow chart sets out the matters a person will need to consider to see if he will need authorisation for carrying on insurance mediation activities. It is referred to in PERG 5.2.3 G (Questions to be considered to decide if authorisation is required).
PERG 5.15.2GRP
Flow chart: regulated activities related to insurance mediation activities – do you need authorisation?
PERG 2.8.6AGRP
2The exclusions referred to in PERG 2.8.6G (4) and PERG 2.8.6G (13)(c), (d), (e) and (l) will not be available to persons who, in carrying on an arranging activity, are investment firms (see PERG 2.5.4 G (Investment services and activities)).
PERG 2.8.7GRP
The activities of persons appointed under a power of attorney are excluded under article 38 of the Regulated Activities Order, from the regulated activity of managing investments, if specified conditions are satisfied. The exclusion only applies where a person is not carrying on insurance mediation or reinsurance mediation and is subject to further limitations discussed below2. In addition, the following exclusions (outlined in PERG 2.9) apply in specified circumstances where
SUP 12.6.8GRP
(1) Some of the controlled functions, as set out in SUP 10.4.1 R, apply to an appointed representative of a firm, other than an introducer appointed representative, just as they apply to a firm (see SUP 10.1.16 R). These are the governing functions and the customer functions (other than the investment management function) such as, for example, CF 21, the investment adviser function. As explained in SUP 10.1.16A R, SUP 10.1.17G (3) and SUP 10.3.2 G respectively:2(a) the effect
PERG 8.32.12GRP
Where persons are making arrangements concerning contracts of insurance or are carrying on insurance mediation or reinsurance mediation, certain exclusions to article 25 are not available. This results from the requirements of the Insurance Mediation Directive and is explained in more detail in PERG 5.6 (Insurance mediation activities The regulated activities: arranging deals in, and making arrangements with a view to transactions in, contracts of insurance).
SUP 4.2.2GRP
This chapter defines the relationship between firms and their actuaries3 and clarifies the role which actuaries3 play in the FSA's monitoring of firms' compliance with the requirements and standards under the regulatory system. The chapter sets out rules and guidance on the appointment of actuaries3, and the termination of their3 term of office, as well as setting out their respective rights and duties. The purpose of the chapter is to ensure that:3333(1) long-term insurers (other
SUP 3.1.2RRP

Applicable sections (see SUP 3.1.1 R)

(1) Category of firm

(2) Sections applicable to the firm

(3) Sections applicable to its auditor

(1)

Authorised professional firm which is required by IPRU(INV) 2.1.2R to comply with chapters 3, 5,10 or 13 of IPRU(INV) and which has an auditor appointed under or as a result of a statutory provision other than in the Act9 (Note 1)

SUP 3.1 - SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8 - SUP 3.10

(2)

Authorised professional firm not within (1) to which either or both of CASS 2 (Client assets) and CASS 4 (Client money and mandates: designated investment business) applies , unless the firm is regulated by The Law Society (England and Wales), The Law Society of Scotland or The Law Society of Northern Ireland (Note 2)

SUP 3.1 - SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.10

(3)

Authorised professional firm not within (1) or (2) which has an auditor appointed under or as a result of a statutory provision other than in the Act

SUP 3.1, SUP 3.2, SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8

(4)

Bank or building society which in either case carries on designated investment business (Note 2A)

SUP 3.1-SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.10

(5)

Bank or building society which in either case does not carry on designated investment business (Note 2A)

SUP 3.1 - SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8

(5A)

Credit union

SUP 3.1 - SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8

(5B)

ELMI

SUP 3.1 - SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8

(6)

Insurer, the Society of Lloyd's, underwriting agent or members' adviser (Note 5)7

SUP 3.1 - SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8

(7)

Investment management firm, personal investment firm (other than a small personal investment firm), or securities and futures firm (Note 3) which, in each case, has an auditor appointed under or as a result of a statutory provision other than in the Act9

9

SUP 3.1 - SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8 - SUP 3.10

9(7A)

Investment management firm, personal investment firm (other than a small personal investment firm), or securities and futures firm not within (7) to which either or both of CASS 2 (Client assets) and CASS 4 (Client money and mandates: designated investment business) applies

SUP 3.1 - SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.10

9(7B)

UCITS management company

SUP 3.1 - SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8 - SUP 3.10

(8)

Small personal investment firm or service company which, in either case, has an auditor appointed under or as a result of a statutory provision other than in the Act

SUP 3.1, SUP 3.2, SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8

(9)8

Mortgage lender8 which has an auditor appointed under or as a result of a statutory provision other than in the Act9

SUP 3.1 - SUP 3.78

SUP 3.1, SUP 3.2, SUP 3.88

(10)8

Insurance intermediary (other than an exempt insurance intermediary) to which CASS 5 (Client money and mandates) (except for CASS 5.2 (Holding money as agent)) applies (see Note 4)8

SUP 3.1 - SUP 3.78

SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.108

(11)8

Exempt insurance intermediary and insurance intermediary not subject to SUP 3.1.2 R(10) which has an auditor appointed under or as a result of a statutory provision other than in the Act

SUP 3.1, SUP 3.2, SUP 3.78

SUP 3.1, SUP 3.2, SUP 3.88

(12)8

Mortgage intermediary or mortgage administrator which has an auditor appointed under or as a result of a statutory provision other than in the Act.

SUP 3.1, SUP 3.2, SUP 3.78

SUP 3.1, SUP 3.2, SUP 3.88

Note 1 = This chapter applies to an authorised professional firm in row (1) (and its auditor) as if the firm were of the relevant type in the right-hand column of IPRU(INV) 2.1.4R.

Note 2 = In row (2):

(a) CASS 2 (Client assets) is treated as applying only if (i) the firm safeguarding and administering investments in connection with managing investments (other than when acting as trustee) or (ii) it safeguarding and administering investments in relation to bonded investments;

(b) CASS 4 (Client money and mandates: designated investment business) is treated as applying only if the firm receives or holds client money other than under an arrangement where commission is rebated to the client;

but, if CASS 2 or CASS 4 is treated as applying, then SUP 3.10 (Duties of auditors: notification and report on client assets) applies to the whole of the business within the scope of CASS 2 or CASS 4.

Note 2A = For this purpose, designated investment business does not include either or both:

(a) dealing which falls within the exclusion in article 15 of the Regulated Activities Order (Absence of holding out etc) (or agreeing to do so); and

(b) dealing in investments as principal (or agreeing to do so):

(i) by a firm whose permission to deal in investments as principal is subject to a limitation to the effect that the firm, in carrying on this regulated activity, is limited to entering into transactions in a manner which, if the firm was an unauthorised person, would come within article 16 of the Regulated Activities Order (Dealing in contractually based investments); and

(ii) in a manner which comes within that limitation;

having regard to article 4(4) of the Regulated Activities Order (Specified activities: general: core investment services by investment firms).

Note 3 = This note applies in relation to an oil market participant to which IPRU(INV) 3 does not apply and in relation to an energy market participant to which IPRU(INV) 3 does not apply. In SUP 3:

(a) only SUP 3.1, SUP 3.2 and SUP 3.7 are applicable to such a firm; and

(b) only SUP 3.1, SUP 3.2 and SUP 3.8 are applicable to its auditor;

and, in each case, only if it has an auditor appointed under or as a result of a statutory provision other than in the Act.

Note 4 = The client money audit requirement in SUP 3.1.2 R(10) therefore applies to all insurance intermediaries except:8

• those which do not hold client money or other client assets in relation to insurance mediation activities; or 8

• those which only hold up to, but not exceeding, £30,000 of client money under a statutory trust arising under CASS 5.3.8

Insurance intermediaries which, in relation to insurance mediation activities, hold no more than that amount of client money only on a statutory trust are exempt insurance intermediaries.8

Note (5) = In row (6):7

(a)7

SUP 3.1 - SUP 3.7 applies to a managing agent in respect of its own business and in respect of the insurance business of each syndicate which it manages; and7

(b)7

SUP 3.1, SUP 3.2 and SUP 3.8 apply to the auditors of a managing agent and the auditors of the insurance business of each syndicate which the managing agent manages.1234567
PERG 8.17A.1GRP
The application of section 21 of the Act and of exemptions in the Financial Promotion Order to invitations or inducements about insurance mediation activities will vary depending on the type of activity. The implementation of the Insurance Mediation Directive has not led to any changes in the definitions of a controlled investment or a controlled activity under the Financial Promotion Order. So:(1) rights under any contract of insurance are a controlled investment;(2) rights to
SUP App 3.3.2GRP
The Treaty provides the framework for the provision of banking, insurance business, investment business, UCITS management services and insurance mediation1, while the Single Market Directives clarify the rights and freedoms within that framework.1
PERG 1.4.2GRP

Table: list of general guidance to be found in PERG.

Chapter:

Applicable to:

About:

PERG 2:

Authorisation and regulated activities

PERG 3:

Issuing e-money

a person who needs to know

  • whether a particular electronic payment product ise-money and whether the person issuing it needs to beauthorised under the Act
  • whether any communications about the product will be restricted

PERG 4:

Regulated activities connected with mortgages

any person who needs to know whether the activities he conducts in relation to mortgages are subject to FSA regulation. This is likely to include:

  • lenders
  • administration service providers
  • mortgage brokers and advisers

the scope of relevant orders (in particular, the Regulated Activities Order) as respects activities concerned with mortgages

PERG 5:

Insurance

mediation

activities

any person who needs to know whether he carries on insurance mediation activities and is, thereby, subject to FSA regulation. This is likely to include:

the scope of relevant orders (in particular, the Regulated Activities Order) as respects activities concerned with the sale or administration of insurance

PERG 6:

Identification of contracts of insurance

any person who needs to know whether a contract with which he is involved is a contract of insurance

the general principles and range of specific factors that the FSA regards as relevant in deciding whether any arrangement is a contract of insurance

PERG 7:

Periodical publications, news services and broadcasts: application for certification

any person who needs to know whether he will be regulated for providing advice about investments through the medium of a periodical publication, a broadcast or a news service

PERG 8:

Financial promotion and related activities

any person who needs to know

PERG 9:

Meaning of open-ended investment company

any person who needs to know whether a body corporate is an open-ended investment company as defined in section 236 of the Act (Open-ended investment companies) and is therefore a collective investment scheme.

the circumstances in which a body corporate will be an open-ended investment company

PERG 10:

Activities related to pension schemes

Any person who needs to know whether his activities in relation to pension schemes will amount to regulated activities or whether the restriction in section 21 of the Act will apply to any financial promotions he may make.1

1

  • the regulated activities that arise in connection with the establishment and operation of pension schemes and any exclusions that may be relevant
  • the circumstances in which financial promotions about pension schemes may be exempt from the restriction in section 21 of the Act1

4PERG 11:

Property investment clubs and land investment schemes

Any person who needs to know whether his activities in relation to property investment clubs and land investment schemes will amount to regulated activities or whether the restriction in section 21 of the Act will apply to any financial promotions he may make.

  • the regulated activities that may arise in connection with the establishment and operation of property investment clubs and land investment schemes and any exclusions that may be relevant
  • the extent to which the financial promotion restriction in section 21 of the Act applies

2PERG 12:

Running or advising on personal pension schemes

any person who needs to know whether his activities in relation to establishing, running, advising on or marketing personal pension schemes will amount to regulated activities

the regulated activities that arise in connection with establishing, running, advising on or marketing personal pension schemes and any exclusions that may be relevant

3PERG 13:

Guidance on the scope of the Markets in Financial Instruments Directive and the recast Capital Adequacy Directive

[to be issued]

3PERG 14:

Home reversion and home finance activities

Any person who needs to know whether his activities in relation to home reversion plans or home purchase plans will amount to regulated activities or whether the restriction in section 21 of the Act will apply to any financial promotions he may make.