Related provisions for PERG 6.6.4

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ICOBS 5.3.2GRP
In taking reasonable care to ensure the suitability of advice on a payment protection contract or a pure protection contract a firm should:(1) establish the customer's demands and needs. It should do this using information readily available and accessible to the firm and by obtaining further relevant information from the customer, including details of existing insurance cover; it need not consider alternatives to policies nor customer needs that are not relevant to the type of
ICOBS 5.3.3RRP
If an insurance intermediary informs a customer that it gives advice on the basis of a fair analysis, it must give that advice on the basis of an analysis of a sufficiently large number of contracts of insurance available on the market to enable it to make a recommendation, in accordance with professional criteria, regarding which contract of insurance would be adequate to meet the customer's needs. [Note: article 12(2) of the Insurance Mediation Directive]
ICOBS 7.1.1RRP
1A consumer has a right to cancel, without penalty and without giving any reason, within:(1) 30 days for a contract of insurance which is, or has elements of, a pure protection contract or payment protection contract; or(2) 14 days for any other contract of insurance or distance contract.[Note: article 6(1) of the Distance Marketing Directive in relation to a distance contract and article 35 of the Consolidated Life Directive in relation to a pure protection contract]
ICOBS 7.1.3RRP
The right to cancel does not apply to:(1) a travel and baggage policy or similar short-term policy of less than one month's duration; (2) a policy the performance of which has been fully completed by both parties at the consumer's express request before the consumer exercises his right to cancel;(3) a pure protection contract of six months’ duration or less which is not a distance contract;(4) a pure protection contract effected by the trustees of an occupational pension scheme,
ICOBS 7.1.4GRP
A ‘similar short-term policy’ is any policy where the event or activity being insured is less than one month's duration. ‘Duration’ refers to the period of cover rather than the period of the contract.
ICOBS 4.1.2RRP
Prior to the conclusion of an initial contract of insurance and, if necessary, on its amendment or renewal, a firm must provide the customer with at least:(1) its name and address;(2) the fact that it is included in the FSA Register and the means for verifying this;(3) whether it has a direct or indirect holding representing more than 10% of the voting rights or capital in a given insurance undertaking (that is not a pure reinsurer);(4) whether a given insurance undertaking (that
ICOBS 4.1.6RRP
(1) Prior to the conclusion of an initial contract of insurance (other than a connected travel insurance contract)2 and, if necessary, on its amendment or renewal, a firm must tell the customer whether:(a) it gives advice on the basis of a fair analysis of the market; or(b) it is under a contractual obligation to conduct insurance mediation business exclusively with one or more insurance undertakings; or(c) it is not under a contractual obligation to conduct insurance mediation
ICOBS 4.1.7RRP
Prior to conclusion of an initial contract of insurance with a consumer a firm must state whether it is giving a personal recommendation or information.
ICOBS 4.1.9RRP
(1) All information to be provided to a customer in accordance with this chapter must be communicated:(a) on paper or on any other durable medium available and accessible to the customer;(b) in a clear and accurate manner, comprehensible to the customer; and(c) in an official language of the State of the commitment or in any other language agreed by the parties.(2) The information may be provided orally where the customer requests it, or where immediate cover is necessary. (3)
ICOBS 7.2.3GRP
The amount payable may include: (1) any sums that a firm has reasonably incurred in concluding the contract, but should not include any element of profit;(2) an amount for cover provided (i.e. a proportion of the policy's exposure that relates to the time on risk);(3) a proportion of the commission paid to an insurance intermediary sufficient to cover its costs; and(4) a proportion of any fees charged by an insurance intermediary which, when aggregated with any commission to be
ICOBS 7.2.4GRP
In most cases, the FSA would expect the proportion of a policy's exposure that relates to the time on risk to be a pro rata apportionment. However, where there is material unevenness in the incidence of risk, an insurer could use a more accurate method. The sum should be reasonable and should not exceed an amount commensurate to the risk incurred.
ICOBS 7.2.9RRP
Any sums payable under this section are owed as simple contract debts and may be set off against each other.
DISP App 1.3.2GRP
12In practice, it is likely to be appropriate for a complainant whose complaint has been upheld to convert to a repayment mortgage, whether or not there is financial loss to date. It will normally be possible for complainants to do so without incurring unreasonable cost. Conversion will of course mean that the complainant no longer has a policy.
DISP App 1.3.8GRP
12As stated, one aspect of the conversion process is the disposal of the endowment policy. The standard approach to assessing loss requires firms to calculate loss using the surrender value. However, once loss is established on this basis and firms move to deal with redress, they may wish to consider whether there is a role for the policy's 'market value' within the traded endowment policy (TEP) market.
DISP App 1.3.9GRP
12A firm may arrange the sale of the endowment policy on the traded endowment market, provided the full implications of such a course of action are explained to the complainant and his express consent is obtained for the firm to arrange the sale. This includes informing the investor that he will continue to be the life assured under the policy. The complainant should be informed that such an arrangement may reduce or eliminate the amount of redress actually borne by the firm,
DISP App 1.3.10GRP
12In the event that a complainant is willing to pursue this option, a firm should first have assessed the complainant's loss using the approach set out in this appendix, and the minimum amount the complainant should receive under such a sale arrangement is the sum representing the position the complainant should have been in under this appendix together with the reimbursement of remortgaging costs. In order to ensure the process does not delay the provision of redress, the firm
ICOBS 5.2.1RRP
This section applies to:(1) an insurance intermediary in relation to any policy (other than a connected travel insurance contract);1 and(2) an insurer when it has given a personal recommendation to a consumer on a payment protection contract or a pure protection contract.
ICOBS 5.2.2RRP
(1) Prior to the conclusion of a contract, a firm must specify, in particular on the basis of information provided by the customer, the demands and the needs of that customer as well as the underlying reasons for any advice given to the customer on that policy.(2) The details must be modulated according to the complexity of the policy proposed.[Note: article 12(3) of the Insurance Mediation Directive]
ICOBS 5.2.3RRP
(1) A statement of demands and needs must be communicated:(a) on paper or on any other durable medium available and accessible to the customer;(b) in a clear and accurate manner, comprehensible to the customer; and(c) in an official language of the State of the commitment or in any other language agreed by the parties.(2) The information may be provided orally where the customer requests it, or where immediate cover is necessary. (3) In the case of telephone selling, the information
GEN 6.1.5RRP
No firm may enter into, arrange, claim on or make a payment under a contract of insurance that is intended to have, or has or would have, the effect of indemnifying any person against all or part of a financial penalty
GEN 6.1.6RRP
The Society, managing agents and members' agents must not cause or permit any member, in the conduct of his insurance business at Lloyd's, to enter into, arrange, claim on or make a payment under a contract of insurance that is intended to have, or has or would have, the effect of indemnifying any person against all or part of a financial penalty.
GEN 6.1.7GRP
GEN 6.1.5 R and GEN 6.1.6 R do not prevent a firm or member from entering into, arranging, claiming on or making any payment under a contract of insurance which indemnifies any person against all or part of the costs of defending FSA enforcement action or any costs they may be ordered to pay to the FSA.
PERG 2.9.8GRP
Broadly speaking, the exclusions focus on cases where the main business of a person is to sell goods or supply services but where certain activities may have to be carried on for the purposes of that business which would otherwise be regulated activities. The exclusions are not available where the customer to whom goods are sold or services are supplied is an individual. They are also not available where what is at issue is a transaction entered into, or service provided, in relation
PERG 2.9.10GRP
These exclusions apply to intra-group dealings and activities and to dealings or activities involving participators in a joint enterprise which take place for the purposes of, or in connection with, the enterprise. The general principle here is that, as long as activities that would otherwise be regulated activities take place wholly within a group of companies, then there is no need for authorisation. The same principle applies to dealings or activities that take place wholly
PERG 2.9.12GRP
The exclusions apply in relation to transactions to buy or sellshares in a body corporate where, in broad terms:(1) the transaction involves the acquisition or disposal of a least 50 per cent of the voting shares in the body corporate and is, or is to be, between certain specified kinds of person; or(2) the object of the transaction may otherwise reasonably be regarded as being the acquisition of day-to-day control of the affairs of the body corporate.These exclusions also apply
PERG 2.9.19GRP
The exclusions in this group apply to certain regulated activities involving certain contracts of insurance. The exclusions and the regulated activities to which they apply are as follows.(1) The first exclusion of this kind relates to certain activities carried on by a provider of non-motor goods or services related to travel in connection with general insurance contracts only. The contracts must be for five years duration or less and have an annual premium of no more than 500.
ICOBS 8.3.1GRP
This section applies to an insurance intermediary, and to an insurer handling a claim on another insurance undertaking'spolicy.
ICOBS 8.3.3GRP
(1) Principle 8 requires a firm to manage conflicts of interest fairly. SYSC 10 also requires an insurance intermediary to take all reasonable steps to identify conflicts of interest, and maintain and operate effective organisational and administrative arrangements to prevent conflicts of interest from constituting or giving rise to a material risk of damage to its clients. 1(2) [deleted]11(3) If a firm acts for a customer in arranging a policy, it is likely to be the customer's
PERG 6.3.2GRP
The Regulated Activities Order, which sets out the activities for which authorisation is required, does not attempt an exhaustive definition of a 'contract of insurance'. Instead, it makes some specific extensions and limitations to the general common law meaning of the concept. For example, it expressly extends the concept to fidelity bonds and similar contracts of guarantee, which are not contracts of insurance at common law, and it excludes certain funeral plan contracts, which
PERG 6.3.3GRP
The courts have not fully defined the common law meaning of 'insurance' and 'insurance business', since they have, on the whole, confined their decisions to the facts before them. They have, however, given useful guidance in the form of descriptions of contracts of insurance.
ICOBS 4.4.1RRP
(1) An insurance intermediary must, on a commercial customer's request, promptly disclose the commission that it and any associate receives in connection with a policy.(2) Disclosure must be in cash terms (estimated, if necessary) and in writing or another durable medium. To the extent this is not possible, the firm must give the basis for calculation.
ICOBS 4.4.3GRP
(1) The commission disclosure rule is additional to the general law on the fiduciary obligations of an agent in that it applies whether or not the insurance intermediary is an agent of the commercial customer.(2) In relation to contracts of insurance, the essence of these fiduciary obligations is generally a duty to account to the agent’s principal. But where a customer employs an insurance intermediary by way of business and does not remunerate him, and where it is usual for
SUP App 2.8.1RRP
If a firm decides to cease to effect new contracts of insurance, it must, within 28 days of that decision, submit a run-off plan to the FSA including: (1) a scheme of operations; and (2) an explanation of how, or to what extent, all liabilities to policyholders (including, where relevant, liabilities which arise from the regulatory duty to treat customers fairly in setting discretionary benefits) will be met in full as they fall due.
SUP App 2.8.4GRP
Under Principle 11, the FSA normally expects to be notified by a firm when it decides to cease effecting new contracts of insurance in respect of one or more classes of contract of insurance (see SUP 15.3.8 G). At the same time, the FSA would normally expect the firm to discuss with it the need for the firm to apply to vary its permission (see SUP 6.2.6 G and SUP 6.2.7 G) and, if appropriate, to submit a scheme of operations in accordance with SUP App 2.8.1 R.
PERG 5.13.3GRP
An appointed representative can carry on only those regulated activities which are specified in the Appointed Representatives Regulations. The regulated activities set out in the table in PERG 5.13.4 G are included in those regulations. As set out in the table, the insurance mediation activities that can be carried on by an appointed representative differ depending on the type of contracts of insurance in relation to which the activities are carried on.
PERG 5.13.4GRP

Insurance mediation activities able to be carried on by an appointed representative. This table belongs to PERG 5.13.3 G.

Type of contract of insurance

Regulated activities an appointed representative can carry on

General insurance contract

Pure protection contract

Life policy

PERG 5.13.6GRP
Where a person is already an appointed representative and he proposes to carry on any insurance mediation activities, he will need to consider the following matters.(1) He must become authorised if his proposed insurance mediation activities include activities that do not fall within the table in PERG 5.13.4 G (for example, dealing as agent in pure protection contracts) and he wishes to carry on these activities. The Act does not permit any person to be exempt for some activities
PERG 2.7.4GRP
In addition, certain other activities carried on in relation to rights under contracts of insurance are regulated activities. These are where the activity is carried on in relation to:(1) life policies, where the regulated activities concerned are:(a) dealing in investments as principal (see PERG 2.7.5 G);(b) managing investments (see PERG 2.7.8 G);(c) safeguarding and administering investments (see PERG 2.7.9 G); and(d) agreeing to carry on any of those activities (see PERG 2.7.21
PERG 2.7.7BFGRP
8In the FSA's view, a mere passive display of literature advertising investments would not amount to the article 25(2) activity. Further guidance on this point can be found in PERG 5.6.4 G. Although this guidance is in relation to contracts of insurance, the principle is not limited to them.
PERG 2.7.7CGRP
Further guidance on the arranging activities as they relate to home finance transactions and contracts of insurance is in PERG 4.5 (Arranging regulated mortgage contracts), PERG 14.3 and PERG 14.4 (Guidance on home reversion and home purchase activities)3 and PERG 5.6 (The regulated activities: arranging deals in, and making arrangements with a view to transactions in, contracts of insurance) respectively.3
MCOB 10.4.2RRP
The amounts of the following charges are included in the total charge for credit in relation to an agreement, with the exceptions in MCOB 10.4.4 R:(1) the total of the interest on the credit which may be provided under the agreement; (2) other charges at any time payable under the transaction by or on behalf of the customer, whether to the firm or any other person; and(3) a premium under a contract of insurance, payable under the transaction by the customer, where the making or
MCOB 10.4.4RRP
(1) The amounts of the following items are not included in the total charge for credit in relation to an agreement:(a) any charge payable under the transaction to the firm upon failure by the customer to do or to refrain from doing anything which he is required to do or to refrain from doing;(b) any charge:(i) which is payable by the firm to any person upon failure by the customer to do or to refrain from doing anything which he is required under the transaction to do or to refrain
PERG 5.1.1GRP
This chapter applies principally to any person who needs to know whether he carries on insurance mediation activities and is thereby subject to FSA regulation. As such it will be of relevance among others to:(1) insurance brokers;(2) insurance advisers;(3) insurance undertakings; and(4) other persons involved in the sale and administration of contracts of insurance, even where these activities are secondary to their main business.
PERG 5.1.11GRP
A person may wish to carry on activities related to other forms of investment in connection with contracts of insurance, such as advising on and arrangingregulated mortgage contracts. Such a person should also consult the guidance in PERG 2 (Authorisation and Regulated Activities), PERG 4 (Regulated activities connected with mortgages) and PERG 8 (Financial Promotion and Related Activities).
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
PERG 8.17A.2GRP
This means that an insurance intermediary will not be communicating a financial promotion:(1) where the only activity to which the promotion relates is assisting in the administration and performance of a contract of insurance; or(2) purely by reason of his inviting or inducing persons to make use of his advisory or arranging services where they relate only to general insurance contracts or pure protection contracts or both.But as regards (2), an intermediary will be communicating
PERG 8.36.4GRP

Table Controlled investments

1.

A deposit.

2.

Rights under a contract of insurance.

3.

Shares etc.

4

Instruments creating or acknowledging indebtedness (referred to in the Glossary as debentures and alternative debentures).9

5.

Government and public securities.

6.

Instruments giving entitlement to investments (referred to in the Glossary as warrants).

7.

Certificates representing certain securities.

8.

Units in a collective investment scheme.

9.

Rights under a stakeholder pension scheme or a personal pension scheme2.

10.

Options.

11.

Futures.

12.

Contracts for differences etc.

13.

Lloyd's syndicate capacity and syndicate membership.

14.

Funeral plan contracts

15.

Agreements for qualifying credit

316.

Rights under a home reversion plan.

317.

Rights under a home purchase plan.

717A.

Rights under a regulated sale and rent back agreement

18.3

3

Rights to or interests in anything falling under 1 to 143 above.

3
PERG 8.36.6GRP

Table Application of Exemptions to Forms of Promotions

Financial Promotion Order

Applies to

Article No.

Title and PERG 8 reference (where applicable)

Unsolicited real time

Solicited real time

Non-real time

(solicited or unsolicited)

12

Communications to overseas recipients (8.12.2G)

*1

*

*

13

Communications from customers and potential customers (8.12.9G)

*

*

*

14

Follow up non-real time communications and solicited real time communications (8.12.10G)

*

*

15

Introductions (8.12.11G)

*

*

*1

16

Exempt persons (8.12.12G)

*2

*3

*3

17

Generic promotions (8.12.14G and 8.21.4G)

*

*

*

17A1

Communications caused to be made or directed by unauthorised persons (8.6.7AG)

*

*

*

18

Mere conduits (8.12.18G)

*

*

*

18A

Outgoing electronic commerce communications: mere conduits, caching and hosting (8.12.18G)1

*

*

*

19

Investment professionals (8.12.21G and 8.21.5G)

*

*

*

20

Communications by journalists (8.12.23G)

*

20A

Promotion broadcast by company director etc (8.12.23G and 8.21.6G)

*

*

*

20B

Incoming electronic commerce communications (8.12.38G)

*

*

*

22

Deposits : non-real time communications (8.13)

*

23

Deposits : real time communications (8.13)

*

*

24

Relevant insurance activity : non-real time communications (8.13)

*

25

Relevant insurance activity : non-real time communications : reinsurance and large risks (8.13)

*

26

Relevant insurance activity : real time communications (8.13)

*

*

28

One-off non-real time communications and solicited real time communications (8.14.3G)

*

*

28A

One-off unsolicited real time communications (8.14.11G)

*

28B1

Real time communications: introductions in connection with qualifying credit (8.17.12G)

*

*

29

Communications required or authorised by enactments

*

*

*

30

Overseas communicators: solicited real time communications (8.14.15G)

*

31

Overseas communicators: non-real time communications to previously overseas customers (8.14.17G)

*

32

Overseas communicators: unsolicited real time communications to previously overseas customers (8.14.16G)

*

33

Overseas communicators: unsolicited real time communications to knowledgeable customers (8.14.16G)

*

34

Governments, central banks etc

*

*

35

Industrial and provident societies

*

*

36

Nationals of the EEA States other than United Kingdom (8.14.18G)

*

*

37

Financial markets

*

*

38

Persons in the business of placing promotional material

*

*

*

39

Joint enterprises (8.14.19G)

*

*

*

40

Participants in certain recognised collective investment schemes

*

*

41

Bearer instruments: promotions required or permitted by market rules (8.14.42G)

*

*

42

Bearer instruments: promotions to existing holders (8.14.42G)

*

*

43

Members and creditors of certain bodies corporate (8.14.41G and 8.21.8G)

*

*

44

Members and creditors of open-ended investment companies

*

*

45

Group companies

*

*

*

46

Qualifying credit to bodies corporate (8.17.10G)1

*

*

*

47

Persons in the business of disseminating information (8.21.10G)

*

*

*

48

Certified high net worth individuals (8.14.21G)

*

*

49

High net worth companies, unincorporated associations etc (8.14.25G)

*

*

*

50

Sophisticated investors (8.14.27G)

*

*

*

50A

Self-certified sophisticated investors {8.14.28AG)

*5

*

*

51

Associations of high net worth or sophisticated investors (8.14.29G)

*

*

52

Common interest group of a company (8.14.30G)

*

*

53

Settlors, trustees and personal representatives

*

*

*

54

Beneficiaries of trust, will or intestacy

*

*

*

55

Communications by members of professions (8.15.1G)

*

*

55A

Non-real time communication by members of the professions. (8.15.5G)

*

56

Remedy following report by Parliamentary Commissioner for Administration

*

*

*

57

Persons placing promotional material in particular publications

*

*

*

58

Acquisition of interest in premises run by management companies

*

*

59

Annual accounts and directors' report (8.21.11G)

*

*

*

60

Participation in employee shares schemes

*

*

*

61

Sale of goods and supply of services

*

*

62

Sale of body corporate (8.14.35G)

*

*

*

64

Takeovers of relevant unlisted companies

*

*

*

65

Takeovers of relevant unlisted companies: warrants etc

*

*

*

66

Takeovers of relevant unlisted companies: application forms

*

*

*

67

Promotions required or permitted by market rules (8.21.13G)

*

*

68

Promotions in connection with admission to certain EEA markets (8.21.16G)

*

*

69

Promotions of securities already admitted to certain markets (8.21.17G)

*

*1

701

Promotions included in listing particulars etc (8.21.20G)1

*1

711

Material relating to prospectus for public offer of unlisted securities

*1

721

Pension products offered by employers (8.14.40A)

*

*

*

731

Advice centres (8.14.40B)

*

*

*

1 in limited circumstances only – see article 12(2) of the Financial Promotion Order

2 for the purpose of article 16 (2) only

3 for the purpose of article 16 (1) only1
ICOBS 4.2.4RRP
(1) In a sale that does not involve a personal recommendation, a firm must take reasonable steps to ensure a customer understands he is responsible for deciding whether a policy meets his demands and needs.(2) If this is done orally, the information must be provided to the customer in writing or any other durable medium no later than immediately after the conclusion of the contract. (3) If a firm anticipates providing, or provides, information on any main characteristic of a policy
ICOBS 4.2.5RRP
(1) Prior to the conclusion of an initial contract and, if necessary, on its amendment or renewal, an insurer must disclose to the customer at least:(a) the statutory status disclosure statement (see GEN 4);(b) whose policies it offers; and(c) whether it is providing a personal recommendation or information.(2) If this is done orally, the disclosure must be provided in writing or any other durable medium no later than immediately after the conclusion of the contract.