The Treasury has now laid before Parliament amendments, which will allow appointed representatives (ARs) to conclude all contracts of insurance with the exception of qualifying contracts of long-term insurance and long-term care insurance contracts. Under the current legislation appointed representatives cannot have a binding authority for any long-term insurance which would prevent them selling pure protection policies such as life cover. Many potential ARs currently have binding authorities which include pure protection policies. These include those selling creditor/PPI insurance which often has a separate life cover element. The legislation provides a similar extension for the regulated activity of "assisting in the administration and performance of contracts of insurance".
The Treasury indicated that it does not intend to make any further changes before the legislation comes into effect.
The Treasury has also announced that, following its consultation, consumer complaints in relation to firms covered by the General Insurance Standards Council (GISC) and the Mortgage Code Compliance Board (MCCB) will be "transitioned" to the Financial Ombudsman Service (FOS). This means, for example, that consumers will be able to pursue a complaint and obtain an award from the FOS against a GISC intermediary in respect of business conducted prior to 14 January 2005 (known as "NGI" - this is the date on which the FSA is to become responsible for regulating the sale and administration of general and pure protection contracts) i.e. before the intermediary became subject to FSA Regulation.
Finally, there is increasing focus on the huge range of businesses, which may potentially fall within the perimeter of FSA Regulation at NGI. This includes a wide variety of sectors, from marketing companies to group risk managers and a huge range of businesses which are involved with insurance as a secondary activity, from property agents and dentists to retailers and many commercial sector businesses.
We are developing a range of different products to enable insurance to be sold without the need for the point of sale to be FSA authorised (or appointed as an AR) and without the need to comply with FSA conduct of business rules. The schemes are relevant to insurers and wholesale brokers as well as companies involved at the point of sale (and the trade associations which represent them).
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Please contact Nick Paul on +44 (0) 20 7367 2806 or at [email protected] or Paul Edmondson on +44 (0) 20 7367 2877 or at [email protected] if you would like to discuss one of these structures.