ICOBS at a glance – highlights of the new rules

marshallka

ICOBS at a glance – highlights (continued)
Requirements for protection products - pure protection contracts and payment protection
policies (PPI) – or, where indicated, solely for PPI.
These apply in addition to or instead of the requirements overleaf.

Note:

This is a summary of the main requirements within ICOBS but it does not include the totality of the requirements

for all firms. Firms must refer to the FSA Handbook to ensure that they are aware of and in compliance with all the

rules applicable to them. There are variations to the requirements and timing of information for sales by telephone and

internet. In addition, different provisions may apply depending on the type of customer with whom a firm is dealing.




Status

disclosure

(R) All firms - in a non-advised sale, a firm must take steps to ensure the customer understands that he is responsible
for deciding if a policy meets his demands and needs. If a firm provides information orally on a main characteristic
of a policy, it must take reasonable steps to explain the customer's responsibility orally.
(R) Insurers - must disclose at least the name of the regulator, whose policies they offer, and whether they are providing
a personal recommendation or information.
(R) Intermediaries – same as overleaf
(R) All firms - if part of the status information is delivered orally, all elements must be delivered orally.
Suitability

(G) In an advised sale, a firm should obtain relevant information to determine demands and needs and take into

account existing cover, the level of cover provided by the policy, cost, relevant exclusions and conditions. It should

tell the customer of any demands and needs not met. In a non-advised sale the firm would also need to give a

customer a record of all his demands and needs that have been discussed and provide a key features document.




Eligibility

(R) A firm arranging a PPI policy must take reasonable steps to ensure a customer only buys a policy under which he is

eligible to claim benefits. The firm must tell the customer, if it finds out when arranging the policy, that parts of

the cover do not apply.

Product

Disclosure

(R) If a firm provides any information orally to a customer on a main characteristic of a policy, it must do so for all of
the policy's main characteristics.
(R) A firm must take reasonable steps to ensure the information provided orally is sufficient to enable the customer
to take an informed decision without overloading the customer or obscuring other parts of the information.
(R) A policy summary is required in good time before the conclusion of the contract.
(R) A firm must draw a consumer's attention to reading PPI documentation before the end of the cancellation period
to check it is suitable. This information must be given orally if a firm provides information orally on a main
characteristic of the policy.
Price
disclosure
(R) A firm must provide price information in a way calculated to enable the customer to relate it to a regular budget.
(G) Price information is considered a main characteristic of the policy, so must be provided orally if another main
characteristic is disclosed orally.
(R) Premiums paid using a non-revolving credit agreement, e.g. single premium PPI, must be disclosed in a way
calculated to enable the customer to understand the total cost of the policy and the additional repayments that
relate to the purchase of the policy.
(G) Price information for policies sold with revolving credit should enable a typical customer to understand the typical
cumulative cost of the policy.
Cancellation

(R) Consumers have a right to cancel pure protection contracts and all PPI contracts (not just those with a life

insurance element) within 30 days for any reason and without penalty. They can obtain a full refund of premium

for pure protection contracts. They can obtain a full refund for PPI contracts unless a claim has been made within

the cancellation period and settlement terms are subsequently agreed.




Claims

Handling
No additional requirements.






Summary:** New ICOBS rules that come into being 6 January 2008 to replace ICOB

http://www.fsa.gov.uk/smallfirms/resources/factsheets/pdfs/ICOB_ataglance.pdf

marshallka

Some may find these rules helpful when making a complaint.

Good as a sticky perhaps.