Insurance Conduct of Business Sourcebook

The FSA's new Insurance Conduct of Business Sourcebook (ICOBS) came into force in January, with a six month transitional period. This is the latest step in the move towards principle based regulation which encourages firms to focus on what regulation is trying to achieve, rather than simply complying with the letter of the law.

While this will allow your firm more flexibility when selling GI products such as Building & Contents insurance, the FSA still require the same standards of conduct and consumer safeguards to remain.

For protection products including MPPI, there are a small number of additional rules which include but are not limited to:

• Informing customers in a non-advised sale that they are solely responsible for deciding whether the policy is suitable for their needs.
• Taking reasonable steps to ensure that customers are eligible for benefits under the policy before they sell the insurance.
• Telling customers verbally about the main characteristics of a policy (significant benefits, exclusions, duration and price) during the sales conversation and before the customer makes any decisions on purchase.
• Extending the statutory cancellation period from 14 to 30 days and ensuring customers are told to check their policy documents within the cancellation period.

Here at Paymentshield, we are currently reviewing our sales platform and documentation, making changes where appropriate to ensure that we are compliant with the new rules.

Firms must refer to the FSA Handbook for the full requirements but the FSA have published a useful summary of the new rules which can be found on the FSA website.

This page is intended solely for the attention of Directly Authorised or Exempt firms as defined by the Financial Services Authority.