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B. I. B. A. British Insurance Brokers’ Association. BRITISH INSURANCE BROKERS ’ ASSOCIATION. INSURANCE MEDIATION DIRECTIVE ( DON’T FORGET THE DISTANCE MARKETING & E- COMMERCE DIRECTIVES ). INSURANCE MEDIATION DIRECTIVE UK GOVERNMENT (TREASURY)
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B I B A British Insurance Brokers’ Association BRITISH INSURANCE BROKERS’ASSOCIATION
INSURANCE MEDIATION DIRECTIVE ( DON’T FORGET THE DISTANCE MARKETING & E- COMMERCE DIRECTIVES )
INSURANCE MEDIATION DIRECTIVE UK GOVERNMENT (TREASURY) - SETS SCOPE – MINIMUM REQUIREMENTS. - ENACTS LEGISLATION.
INSURANCE MEDIATION DIRECTIVE UK GOVERNMENT (TREASURY) - SETS SCOPE – MINIMUM REQUIREMENTS - ENACTS LEGISLATION FINANCIAL SERVICES AUTHORITY (FSA) - AUTHORISE FIRMS AND INDIVIDUALS - SET RULES FOR CONDUCT - MONITOR COMPLIANCE AND ENFORCE
TREASURY CONSULTATIONENDED JANUARYWHICH INSURANCECONTRACTS?EXEMPTIONS ?
TREASURY CONSULTATIONENDED JANUARY WHICH ACTIVITIES WILL BE REGULATED Introducing, proposing, carrying out work preparatory to contract Concluding contracts Assisting in the administration and performance of such contracts, in particular in event of claim. - Advising/arranging deals.
WHO WILL BE REGULATED?INTERMEDIARIES, INCLUDES EMPLOYEES OF INSURERS FOR “RETAIL RISKS” APPOINTED REPRESENTATIVE REGIME TO APPLYDESIGNATED PROFESSIONAL BODY REGIME
FSA OBJECTIVES. CONSUMER PROTECTION MARKET CONFIDENCE CONSUMER EDUCATION FINANCIAL CRIME
FSA CONSULTATION PAPERS (C.P.’s) CP160 SELLING & ADMINISTRATION CLOSED 11/3 CP159 APPOINTED REPS (AR) CLOSED 31/3 CP174 PRUDENTIAL REQUIREMENTS CLOSED 13/6 CP180 FEES ( Also CP192 closes 28/10 ) CLOSED 24/6 CP 187 SELLING & ADMINISTRATION & MISC AMENDMENTS Closes 30/9
TIMETABLE DRAFT REPORTING REQUIREMENTS SEPT 2003 FINAL AR RULES SEPTEMBER 2003 DRAFT CONDUCT OF BUSINESS RULES SEPT 2003 APPLICATION PACKS AVAILABLE “FINAL QUARTER” FINAL CONDUCT OF BUSINESS RULES JAN 2004 FEEDBACK APPLN FEES ( CP180 ) SEPT 03 CP ANNUAL FEES /FOS JAN2004 APPLICATIONS “EARLY” 2004 FSA REGULATION COMMENCES 14.01.05
FSA CONSULTATION 160/187 CUSTOMER CLASSIFICATION - RETAIL - COMMERCIAL
FSA CONSULTATION 160/187 CUSTOMER CLASSIFICATION - RETAIL - COMMERCIAL - STATUS DISCLOSURE - COMPLAINTS
CP 160/187 FAIR TREATMENT OF CONSUMERS - COMMISSION DISCLOSURE (COMMERCIAL) - UNFAIR INDUCEMENTS - EXCESSIVE CHARGES (RETAIL) - CANCELLATION RIGHTS (RETAIL) 14 DAYS
CP 160/187FAIR TREATMENT OF CONSUMERS- COMMISSION DISCLOSURE - UNFAIR INDUCEMENTS. - CLAIMS HANDLING CLAIMS - FAIR AND PROMPTLY - PROMPT PAYMENT WHEN SETTLEMENT AGREED. - DISCLOSE ANY POTENTIAL CONFLICT OF INTEREST
CP 160/187 STATUS DISCLOSURE RETAIL CUSTOMERS ( BEFORE CONCLUSION OF POLICY OR INCURRING FEES) • a) STATUTORY STATUS & HOW TO CHECK FSA REGISTER • b) CAPITAL OR VOTING RIGHTS HELD IN OR BY OTHER INSURANCE UNDERTAKINGS (10%) • c) HOW TO COMPLAIN TO THE FIRM & AVAILABILITY OF FOS • d) ANY FEES FOR ADVICE ( AS OPPOSED TO PRODUCT RELATED CHARGES )
CP160/187 PRODUCT DISCLOSURE GIVE RETAIL CLIENTS ON DURABLE MEDIUM PRE COVER FACE TO FACE DISTANCE YES DISTANCE NO (POST/NET) (‘ PHONE) POL SUMMARY * * x PRICE INFO * * x HOW TO CLAIM * POL DOCUM’T * x CAN BE ORAL BUT MUST GIVE ALL INFO IMMEDIATELY AFTERWARDS
CP160/187 PRODUCT DISCLOSURE RETAIL CUSTOMERS - KEY INFO: BENEFITS/EXCLUSIONS UNBUNDLE PREMIUMS / ADVISE IF INSURANCE OPTIONAL? - POLICY SUMMARY / “SIGN POSTING” - RENEWALS MUST BE PROVIDED TO THE CUSTOMER ON “DURABLE MEDIUM” 21 DAYS BEFORE POLICY EXPIRES
CP 159 APPOINTED REPRESENTATIVES (AR) “AR ACTS AS AGENT FOR AUTHORISED FIRMS WHICH ACCEPT CONTRACTUAL RESPONSIBLE (IN WRITING) FOR CERTAIN ACTIVITIES”
CP 159 - AN AR IS EXEMPT FROM AUTHORISATION
CP 159 • AN AR IS EXEMPT FROM AUTHORISATION • REGISTER FOR AR • CANNOT BE EXEMPT AND AUTHORISED
CP 159 • SUBSTITUTABLE PRODUCT CATEGORIES • SINGLE/MULTI PRINCIPAL REGIME. • INTER PRINCIPAL AGREEMENTS
CP 159AR ACTIVITIES - CAN INTRODUCE, ARRANGE, ADVISE
CP 159AR ACTIVITIES • CAN INTRODUCE, ARRANGE, ADVISE • MONEY RESTRICTIONS
CP 159AR ACTIVITIES • CAN INTRODUCE, ARRANGE, ADVISE • MONEY RESTRICTIONS • NO CLAIMS INVOLVEMENT • ? CONCLUDE
CP 159AR ACTIVITIES • CAN INTRODUCE, ARRANGE, ADVISE • MONEY RESTRICTIONS • NO CLAIMS INVOLVEMENT INTRODUCER AR
CP 174PRUDENTIAL AND OTHER REQUIREMENTS • PERIMETER GUIDANCE • HIGH LEVEL STANDARDS SYSTEMS AND CONTROLS. • FINANCIAL RESOURCE • COMPENSATION • LLOYDS
CP 174INTERMEDIARIES FINANCIAL RESOURCE SECURITY COMPENSATION SCHEME P.I. SEGREGATED A/C CAPITAL
CP 174PROFESSIONAL INDEMNITY - LIMITS £1M OR 3 X INCOME MAX £10M. - ALTERNATIVE GROUP G’TEES.
CP 174SEGREGATED ACCOUNTS - COMPULSORY, UNLESS RISK TRANSFERRED
CP 174SEGREGATED ACCOUNTS • COMPULSORY UNLESS RISK TRANSFERRED • STATUTORY TRUST FOR “PRIVATE”
CP 174SEGREGATED ACCOUNTS • COMPULSORY UNLESS RISK TRANSFERRED • STATUTORY TRUST FOR “PRIVATE” • VOLUNTARY TRUST “NON-PRIVATE” • AUDIT
CP 174CAPITAL. NOT HOLDING CLIENT MONEY - MIN 5K OR 5% OF INCOME HOLDING CLIENT MONEY - MIN 10k OR 5% OF INCOME OR 5% OF CLIENT MONEY BALANCES. - INTANGIBLES
CP 174COMPENSATION • EXTEND FSCS • LEVELS 90%, 100% COMPULSTORY • ALREADY INCLUDES “NON PRIVATE” TO £1M TURNOVER
CP 174APPROVED PERSONS • NUMBERS LINKED TO EXECUTIVE BOARD • SMALLER FIRMS ANTICIPATED ONE PERSON WILL MEET CRITERIA
CP 180 APPLICATION FEES • < 31/5 > 31/5 • INCOME e - mail paper e-mail paper • 0 - 1m 500 600 1,100 1,200 • 1 - 25m 8,750 8,750 10,750 11,000 • >25 m 22,500 23,000 24,500 25,000
CP 180FINANCIAL SERVICES COMPENSATION SCHEME • - COMPENSATION FUND LEVY • “Pay as you go” • - MANAGEMENT EXPENSES LEVY • Consultation rules & funding in CP Jan 04
CP180 FINANCIAL OMBUDSMAN • -GENERAL LEVY • - ( IFA 2003/4 £20 per Approved Person • Subject to Minimum £75 per firm ) • - CASE FEE • - £360 per case or £600 per “special” case
CP192 FEES( SUPPLEMENT 180 ) • SUGGESTS THAT DIRECT INSURERS SHOULD HAVE “WEIGHTING” OF 10% ON PREMIUMS TO ARRIVE AT FIGURE ON WHICH THEIR FEES WILL BE CALCULATED • EQUATES TO 9.O9% ? IS THIS ENOUGH ?
EXTERNAL COSTS • APPLICATION FEE • PERIODIC FEES • FINANCIAL SERVICES COMPENSATION • FINANCIAL OMBUDSMAN SERVICE
BROKER COSTS • PROFESSIONAL INDEMNITY INSCE • CAPITAL REQUIREMENTS • TRAINING & COMPETENCE • SYSTEMS ( ? I/T )
BROKER BENEFITS • LEVEL PLAYING FIELD • LESS COMPETITION FOR BROKER SECTOR • MORE ROBUST BUSINESSES • MORE VIBRANT BROKER SECTOR
NEXT STEPS • BE PREPARED - DON’T BE SCARED • BUSINESS & COMPLIANCE PLAN • GAP ANALYSIS & PROJECT PLAN • BE AWARE - HAVE YOUR SAY
B I B A British Insurance Brokers’ Association BRITISH INSURANCE BROKERS’ASSOCIATION