BRITISH BRITISH INSURANCEINSURANCE BROKERSBROKERS’’
ASSOCIATIONASSOCIATION
British Insurance Brokers’ Association
INSURANCE MEDIATION INSURANCE MEDIATION DIRECTIVEDIRECTIVE
( DON’T FORGET THE DISTANCE MARKETING &( DON’T FORGET THE DISTANCE MARKETING &
E- COMMERCE DIRECTIVES )E- COMMERCE DIRECTIVES )
INSURANCE MEDIATION INSURANCE MEDIATION DIRECTIVEDIRECTIVE
UK GOVERNMENT (TREASURY)UK GOVERNMENT (TREASURY)
- SETS SCOPE – MINIMUM- SETS SCOPE – MINIMUM REQUIREMENTS.REQUIREMENTS. - ENACTS LEGISLATION.- ENACTS LEGISLATION.
INSURANCE MEDIATION DIRECTIVEINSURANCE MEDIATION DIRECTIVE
UK GOVERNMENT (TREASURY)UK GOVERNMENT (TREASURY)
- SETS SCOPE – MINIMUM REQUIREMENTS- SETS SCOPE – MINIMUM REQUIREMENTS - ENACTS LEGISLATION - ENACTS LEGISLATION
FINANCIAL SERVICES AUTHORITY (FSA)FINANCIAL SERVICES AUTHORITY (FSA)
- AUTHORISE FIRMS AND INDIVIDUALS- AUTHORISE FIRMS AND INDIVIDUALS - SET RULES FOR CONDUCT- SET RULES FOR CONDUCT - MONITOR COMPLIANCE AND ENFORCE - MONITOR COMPLIANCE AND ENFORCE
TREASURY CONSULTATIONTREASURY CONSULTATION ENDED JANUARYENDED JANUARY
TREASURY CONSULTATIONTREASURY CONSULTATION
ENDED JANUARYENDED JANUARY
WHICH INSURANCEWHICH INSURANCE CONTRACTS?CONTRACTS?
EXEMPTIONS ?EXEMPTIONS ?
TREASURY CONSULTATIONTREASURY CONSULTATION ENDED JANUARYENDED JANUARY
WHICH ACTIVITIES WILL BE REGULATEDWHICH ACTIVITIES WILL BE REGULATED
- Introducing, proposing, carrying out work preparatoryIntroducing, proposing, carrying out work preparatory to contractto contract
- Concluding contractsConcluding contracts
- Assisting in the administration and performance ofAssisting in the administration and performance of such contracts, in particular in event of claim.such contracts, in particular in event of claim.
- Advising/arranging deals.- Advising/arranging deals.
WHO WILL BE REGULATED?WHO WILL BE REGULATED?
WHO WILL BE REGULATED?WHO WILL BE REGULATED?
INTERMEDIARIES, INCLUDES EMPLOYEES OF INTERMEDIARIES, INCLUDES EMPLOYEES OF INSURERS FOR “RETAIL RISKS” INSURERS FOR “RETAIL RISKS”
APPOINTED REPRESENTATIVE REGIME TO APPLYAPPOINTED REPRESENTATIVE REGIME TO APPLY
DESIGNATED PROFESSIONAL BODY REGIMEDESIGNATED PROFESSIONAL BODY REGIME
““PROPORTIONATE” REGULATIONPROPORTIONATE” REGULATION
FSA OBJECTIVES.FSA OBJECTIVES.
CONSUMER PROTECTIONCONSUMER PROTECTION
MARKET CONFIDENCEMARKET CONFIDENCE
CONSUMER EDUCATIONCONSUMER EDUCATION
FINANCIAL CRIMEFINANCIAL CRIME
FSA FSA CONSULTATION PAPERS (C.P.’s)CONSULTATION PAPERS (C.P.’s)
CP160 SELLING & ADMINISTRATIONCP160 SELLING & ADMINISTRATION
CLOSED 11/3CLOSED 11/3
CP159 APPOINTED REPS (AR)CP159 APPOINTED REPS (AR)
CLOSED 31/3CLOSED 31/3
CP174 PRUDENTIAL REQUIREMENTSCP174 PRUDENTIAL REQUIREMENTS
CLOSEDCLOSED 13/6 13/6
CP180 FEES ( Also CP192 closes 28/10 )CP180 FEES ( Also CP192 closes 28/10 )
CLOSED 24/6CLOSED 24/6
CP 187 SELLING & ADMINISTRATION & MISCCP 187 SELLING & ADMINISTRATION & MISC
AMENDMENTSAMENDMENTS Closes 30/9Closes 30/9
TIMETABLETIMETABLEDRAFT REPORTING REQUIREMENTS SEPT 2003DRAFT REPORTING REQUIREMENTS SEPT 2003
FINAL AR RULES SEPTEMBER 2003FINAL AR RULES SEPTEMBER 2003
DRAFT CONDUCT OF BUSINESS RULES SEPT 2003DRAFT CONDUCT OF BUSINESS RULES SEPT 2003
APPLICATION PACKS AVAILABLE “FINAL QUARTER”APPLICATION PACKS AVAILABLE “FINAL QUARTER”
FINAL CONDUCT OF BUSINESS RULES JAN 2004FINAL CONDUCT OF BUSINESS RULES JAN 2004
FEEDBACK APPLN FEES ( CP180 ) SEPT 03FEEDBACK APPLN FEES ( CP180 ) SEPT 03
CP ANNUAL FEES /FOS JAN2004CP ANNUAL FEES /FOS JAN2004
APPLICATIONS “EARLY” 2004APPLICATIONS “EARLY” 2004
FSA REGULATION COMMENCES 14.01.05FSA REGULATION COMMENCES 14.01.05
FSA CONSULTATION 160/187FSA CONSULTATION 160/187
FSA CONSULTATION 160/187FSA CONSULTATION 160/187
CUSTOMER CLASSIFICATIONCUSTOMER CLASSIFICATION
- - RETAILRETAIL
- - COMMERCIALCOMMERCIAL
FSA CONSULTATION 160/187FSA CONSULTATION 160/187
CUSTOMER CLASSIFICATIONCUSTOMER CLASSIFICATION
- - RETAILRETAIL - COMMERCIAL- COMMERCIAL
- - STATUS DISCLOSURESTATUS DISCLOSURE
- COMPLAINTS- COMPLAINTS
CP 160/187CP 160/187
FAIR TREATMENT OF CONSUMERSFAIR TREATMENT OF CONSUMERS
CP 160/187CP 160/187FAIR TREATMENT OF CONSUMERSFAIR TREATMENT OF CONSUMERS
- COMMISSION DISCLOSURE - COMMISSION DISCLOSURE (COMMERCIAL)(COMMERCIAL)
- UNFAIR INDUCEMENTS- UNFAIR INDUCEMENTS
- EXCESSIVE CHARGES (RETAIL)- EXCESSIVE CHARGES (RETAIL)
- CANCELLATION RIGHTS (RETAIL) - CANCELLATION RIGHTS (RETAIL) 14 DAYS 14 DAYS
CP 160/187CP 160/187
FAIR TREATMENT OF CONSUMERSFAIR TREATMENT OF CONSUMERS
- COMMISSION DISCLOSURE- COMMISSION DISCLOSURE - UNFAIR INDUCEMENTS. - UNFAIR INDUCEMENTS.
- CLAIMS HANDLING - CLAIMS HANDLING
CLAIMSCLAIMS
- FAIR AND PROMPTLY- FAIR AND PROMPTLY
- PROMPT PAYMENT WHEN SETTLEMENT AGREED. - PROMPT PAYMENT WHEN SETTLEMENT AGREED.
- DISCLOSE ANY POTENTIAL CONFLICT OF- DISCLOSE ANY POTENTIAL CONFLICT OF
INTEREST INTEREST
CP 160/187CP 160/187STATUS DISCLOSURESTATUS DISCLOSURE
RETAIL CUSTOMERS ( BEFORE CONCLUSION OF POLICY OR INCURRING FEES)RETAIL CUSTOMERS ( BEFORE CONCLUSION OF POLICY OR INCURRING FEES)
a) STATUTORY STATUS & HOW TO CHECK FSA REGISTERa) STATUTORY STATUS & HOW TO CHECK FSA REGISTER b) CAPITAL OR VOTING RIGHTS HELD IN OR BY OTHER INSURANCE UNDERTAKINGS (10%)b) CAPITAL OR VOTING RIGHTS HELD IN OR BY OTHER INSURANCE UNDERTAKINGS (10%)
c) HOW TO COMPLAIN TO THE FIRM & AVAILABILITY OF FOSc) HOW TO COMPLAIN TO THE FIRM & AVAILABILITY OF FOS
d) ANY FEES FOR ADVICE ( AS OPPOSED TO PRODUCT RELATED CHARGES )d) ANY FEES FOR ADVICE ( AS OPPOSED TO PRODUCT RELATED CHARGES )
CP160/187 PRODUCT CP160/187 PRODUCT DISCLOSUREDISCLOSURE
GIVE RETAIL CLIENTS ON DURABLE MEDIUM PRE COVERGIVE RETAIL CLIENTS ON DURABLE MEDIUM PRE COVER
FACE TO FACE DISTANCE YES DISTANCE NOFACE TO FACE DISTANCE YES DISTANCE NO (POST/NET) (‘ PHONE)(POST/NET) (‘ PHONE)
POL SUMMARY * * xPOL SUMMARY * * x
PRICE INFO * * xPRICE INFO * * x
HOW TO CLAIM *HOW TO CLAIM *
POL DOCUM’T *POL DOCUM’T *
x CAN BE ORAL BUT MUST GIVE ALL INFO IMMEDIATELY AFTERWARDSx CAN BE ORAL BUT MUST GIVE ALL INFO IMMEDIATELY AFTERWARDS
CP160/187 PRODUCT CP160/187 PRODUCT DISCLOSUREDISCLOSURE
RETAIL CUSTOMERSRETAIL CUSTOMERS
- KEY INFO: BENEFITS/EXCLUSIONS - KEY INFO: BENEFITS/EXCLUSIONS
UNBUNDLE PREMIUMS / ADVISE IF INSURANCE OPTIONAL?UNBUNDLE PREMIUMS / ADVISE IF INSURANCE OPTIONAL?
- POLICY SUMMARY / “SIGN POSTING” - POLICY SUMMARY / “SIGN POSTING”
- RENEWALS MUST BE PROVIDED TO THE CUSTOMER ON - RENEWALS MUST BE PROVIDED TO THE CUSTOMER ON
“ “DURABLE MEDIUM” 21 DAYS BEFORE POLICY EXPIRESDURABLE MEDIUM” 21 DAYS BEFORE POLICY EXPIRES
CP 159 APPOINTED CP 159 APPOINTED REPRESENTATIVES (AR)REPRESENTATIVES (AR)
““AR ACTS AS AGENT FOR AUTHORISEDAR ACTS AS AGENT FOR AUTHORISED
FIRMS WHICH ACCEPT CONTRACTUALFIRMS WHICH ACCEPT CONTRACTUAL
RESPONSIBLE (IN WRITING) FORRESPONSIBLE (IN WRITING) FOR
CERTAIN ACTIVITIES”CERTAIN ACTIVITIES”
CP 159CP 159
- - AN AR IS EXEMPT FROM AUTHORISATIONAN AR IS EXEMPT FROM AUTHORISATION
CP 159CP 159
- AN AR IS EXEMPT FROM AUTHORISATIONAN AR IS EXEMPT FROM AUTHORISATION
- REGISTER FOR ARREGISTER FOR AR
- CANNOT BE EXEMPT AND AUTHORISEDCANNOT BE EXEMPT AND AUTHORISED
CP 159CP 159
- SUBSTITUTABLE PRODUCT CATEGORIESSUBSTITUTABLE PRODUCT CATEGORIES
- SINGLE/MULTI PRINCIPAL REGIME.SINGLE/MULTI PRINCIPAL REGIME.
- INTER PRINCIPAL AGREEMENTSINTER PRINCIPAL AGREEMENTS
CP 159CP 159AR ACTIVITIESAR ACTIVITIES
- CAN INTRODUCE, ARRANGE, ADVISE- CAN INTRODUCE, ARRANGE, ADVISE
CP 159CP 159AR ACTIVITIESAR ACTIVITIES
- CAN INTRODUCE, ARRANGE, ADVISECAN INTRODUCE, ARRANGE, ADVISE
- MONEY RESTRICTIONSMONEY RESTRICTIONS
CP 159CP 159AR ACTIVITIESAR ACTIVITIES
- CAN INTRODUCE, ARRANGE, ADVISECAN INTRODUCE, ARRANGE, ADVISE
- MONEY RESTRICTIONSMONEY RESTRICTIONS
- NO CLAIMS INVOLVEMENTNO CLAIMS INVOLVEMENT
- ? CONCLUDE? CONCLUDE
CP 159CP 159AR ACTIVITIESAR ACTIVITIES
- CAN INTRODUCE, ARRANGE, ADVISECAN INTRODUCE, ARRANGE, ADVISE
- MONEY RESTRICTIONSMONEY RESTRICTIONS
- NO CLAIMS INVOLVEMENTNO CLAIMS INVOLVEMENT
INTRODUCER ARINTRODUCER AR
CP 174CP 174PRUDENTIAL AND OTHER REQUIREMENTSPRUDENTIAL AND OTHER REQUIREMENTS
- PERIMETER GUIDANCEPERIMETER GUIDANCE
- HIGH LEVEL STANDARDS SYSTEMS AND HIGH LEVEL STANDARDS SYSTEMS AND CONTROLS.CONTROLS.
- FINANCIAL RESOURCEFINANCIAL RESOURCE
- COMPENSATIONCOMPENSATION
- LLOYDSLLOYDS
CP 174CP 174
INTERMEDIARIESINTERMEDIARIES
FINANCIAL RESOURCE SECURITYFINANCIAL RESOURCE SECURITY
P.I. SEGREGATED
A/CCAPITAL
COMPENSATION
SCHEME
CP 174CP 174PROFESSIONAL INDEMNITYPROFESSIONAL INDEMNITY
- LIMITS £1M OR 3 X INCOME- LIMITS £1M OR 3 X INCOME
MAX £10M. MAX £10M.
- ALTERNATIVE GROUP G’TEES.- ALTERNATIVE GROUP G’TEES.
CP 174CP 174
SEGREGATED ACCOUNTSSEGREGATED ACCOUNTS
- COMPULSORY, UNLESS RISK TRANSFERRED- COMPULSORY, UNLESS RISK TRANSFERRED
CP 174CP 174
SEGREGATED ACCOUNTSSEGREGATED ACCOUNTS
- COMPULSORY UNLESS RISK TRANSFERREDCOMPULSORY UNLESS RISK TRANSFERRED
- STATUTORY TRUST FOR “PRIVATE”STATUTORY TRUST FOR “PRIVATE”
CP 174CP 174
SEGREGATED ACCOUNTSSEGREGATED ACCOUNTS
- COMPULSORY UNLESS RISK TRANSFERREDCOMPULSORY UNLESS RISK TRANSFERRED
- STATUTORY TRUST FOR “PRIVATE”STATUTORY TRUST FOR “PRIVATE”
- VOLUNTARY TRUST “NON-PRIVATE”VOLUNTARY TRUST “NON-PRIVATE”
- AUDITAUDIT
CP 174CP 174CAPITAL.CAPITAL.
NOT HOLDING CLIENT MONEYNOT HOLDING CLIENT MONEY
- MIN 5K OR 5% OF INCOME- MIN 5K OR 5% OF INCOME
HOLDING CLIENT MONEYHOLDING CLIENT MONEY
- MIN 10k OR 5% OF INCOME OR 5% OF CLIENT- MIN 10k OR 5% OF INCOME OR 5% OF CLIENT
MONEY BALANCES. MONEY BALANCES.
- INTANGIBLES- INTANGIBLES
CP 174CP 174
COMPENSATIONCOMPENSATION
- EXTEND FSCSEXTEND FSCS
- LEVELS 90%, 100% COMPULSTORYLEVELS 90%, 100% COMPULSTORY
- ALREADY INCLUDES “NON PRIVATE”ALREADY INCLUDES “NON PRIVATE”
TO £1M TURNOVERTO £1M TURNOVER
CP 174CP 174APPROVED PERSONSAPPROVED PERSONS
CP 174CP 174APPROVED PERSONSAPPROVED PERSONS
- NUMBERS LINKED TO EXECUTIVE NUMBERS LINKED TO EXECUTIVE BOARDBOARD
- SMALLER FIRMS ANTICIPATED ONE SMALLER FIRMS ANTICIPATED ONE PERSON WILL MEET CRITERIAPERSON WILL MEET CRITERIA
CP 180 APPLICATION CP 180 APPLICATION FEES FEES
• < 31/5< 31/5 > 31/5> 31/5 INCOMEINCOME e - maile - mail paperpaper e-mail e-mail paper paper
0 - 1m0 - 1m 500 500 600600 1,100 1,100 1,200 1,200
1 - 25m1 - 25m 8,7508,750 8,750 10,750 11,000 8,750 10,750 11,000
>25 m 22,500>25 m 22,500 23,000 24,500 25,000 23,000 24,500 25,000
CP 180CP 180FINANCIAL SERVICES COMPENSATION FINANCIAL SERVICES COMPENSATION
SCHEME SCHEME
- - COMPENSATION FUND LEVYCOMPENSATION FUND LEVY ““Pay as you go”Pay as you go”
- MANAGEMENT EXPENSES LEVY- MANAGEMENT EXPENSES LEVY
Consultation rules & funding in CP Jan 04 Consultation rules & funding in CP Jan 04
CP180 CP180 FINANCIAL OMBUDSMANFINANCIAL OMBUDSMAN
-- GENERAL LEVYGENERAL LEVY - ( IFA 2003/4 £20 per Approved Person- ( IFA 2003/4 £20 per Approved Person
Subject to Minimum £75 per firm ) Subject to Minimum £75 per firm ) - - CASE FEECASE FEE - £360 per case or £600 per “special” - £360 per case or £600 per “special”
case case
CP192 FEESCP192 FEES( SUPPLEMENT 180 )( SUPPLEMENT 180 )
SUGGESTS THAT DIRECT INSURERS SUGGESTS THAT DIRECT INSURERS SHOULD HAVE “WEIGHTING” OF 10% ON SHOULD HAVE “WEIGHTING” OF 10% ON PREMIUMS TO ARRIVE AT FIGURE ON PREMIUMS TO ARRIVE AT FIGURE ON WHICH THEIR FEES WILL BE CALCULATEDWHICH THEIR FEES WILL BE CALCULATED
EQUATES TO 9.O9% ? IS THIS ENOUGH ?EQUATES TO 9.O9% ? IS THIS ENOUGH ?
EXTERNAL COSTSEXTERNAL COSTS
APPLICATION FEE APPLICATION FEE
PERIODIC FEESPERIODIC FEES
FINANCIAL SERVICES COMPENSATIONFINANCIAL SERVICES COMPENSATION
FINANCIAL OMBUDSMAN SERVICE FINANCIAL OMBUDSMAN SERVICE
BROKER COSTSBROKER COSTS
PROFESSIONAL INDEMNITY INSCEPROFESSIONAL INDEMNITY INSCE
CAPITAL REQUIREMENTSCAPITAL REQUIREMENTS
TRAINING & COMPETENCETRAINING & COMPETENCE
SYSTEMS ( ? I/T ) SYSTEMS ( ? I/T )
BROKER BENEFITSBROKER BENEFITS
LEVEL PLAYING FIELDLEVEL PLAYING FIELD
LESS COMPETITION FOR BROKER SECTORLESS COMPETITION FOR BROKER SECTOR
MORE ROBUST BUSINESSESMORE ROBUST BUSINESSES
MORE VIBRANT BROKER SECTORMORE VIBRANT BROKER SECTOR
NEXT STEPSNEXT STEPS
BE PREPARED - DON’T BE SCAREDBE PREPARED - DON’T BE SCARED
BUSINESS & COMPLIANCE PLANBUSINESS & COMPLIANCE PLAN
GAP ANALYSIS & PROJECT PLANGAP ANALYSIS & PROJECT PLAN
BE AWARE - HAVE YOUR SAYBE AWARE - HAVE YOUR SAY
BRITISH BRITISH INSURANCEINSURANCE BROKERSBROKERS’’
ASSOCIATIONASSOCIATION
British Insurance Brokers’ Association
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