Hot Topics

Below is a flavour of some of our recent articles. To access the full article clients can log into the ICS Compliance Manual.

05/12/17 HT 2017-13 IDD Conflicts of Interest

This is the second of a series of Hot TopICS concerning the details of the forthcoming changes that will affect general insurance intermediaries as a result of the Insurance Distribution Directive (IDD). This article looks at the IDD requirements on conflicts of interest and the FCA proposals to implement them.

15/11/17 HT 2017-12 IDD Knowledge & Competence

This is the first of a series of Hot TopICS concerning the details of the forthcoming changes that will affect insurance intermediaries as a result of the imminent implementation of the Insurance Distribution Directive (IDD). This article relates to the changes that arise in the FCA’s requirements for employee knowledge and competence, including the new CPD requirements.

01/11/17 HT 2017-11 IDD Preparation

The IDD is due to be transposed into UK law in 2018 and, whilst some aspects remain under consultation, a number of important changes to FCA rules have already been introduced. The government has said it intends to plough ahead with the IDD provisions regardless of the ongoing Brexit negotiations. It is therefore essential that firms are in a position to comply when the new regime comes into force. Following the FCA’s Policy Statement PS17/21, which set out near-final rules in response to the IDD, this article looks at the main implications for UK insurance brokers in terms of the customers’ best interests rule, pre-contract disclosures, product oversight and distribution and professional indemnity insurance.

19/09/17 HT 2017-10 Succession Planning

Succession planning is crucial to any business but may be overlooked as firms strive to retain or improve their position in the market. This article looks at succession planning as an important aspect of compliance and internal risk management.

1/09/17 HT 2017- 09 Conduct Risk

The FCA’s conduct risk agenda encourages firms to have systems and frameworks in place to identify and manage conduct risk.  Conduct risk is akin to but goes beyond the principle of “treating customers fairly”.  This article looks at conduct risk and how insurance brokers might address it.

04/08/17 HT 2017- 08 Cyber risks

Several instances of Ransomware attacks have raised the visibility of cyber-attacks in recent months. Naturally, the FCA is concerned to ensure that regulated firms react appropriately to the threats to which they are exposed and protect the data and sensitive information that they hold. This article looks at the threats posed and the measures firms can take to help to protect themselves

13/07/17 HT 2017- 07 Pitfalls

Claims against brokers often arise when an insurer denies or reduces a claim through non-disclosure, misrepresentation, under-insurance or non-adherence to policy terms and conditions. In this article, Barry Hammond, who has been an expert witness on broker negligence cases for nearly 20 years, explains some of the things which brokers can get wrong and offers his tips on avoiding claims for professional negligence.

11/05/17 HT 2017- 06 FCA Business Plan and Risk Outlook

The FCA has signalled that it will be paying particular attention to insurance distribution models and pricing as part of its Business Plan for 2017-18. This article provides an overview of the “Risk Outlook” for insurance firms and the regulator’s plans to address some of the issues.

13/04/17 HT 2017- 05 Preparing for General Data Protection Regulation

The General Data Protection Regulation (GDPR) will apply in the UK from 25 May 2018, replacing the Data Protection Act 1998. The changes are wide-ranging and include new provisions for the ‘right to be forgotten’, data portability and data breach notification. The UK Information Commissioners Office (ICO) has advised data controllers and processors to start planning for the changes brought about by GDPR as early as possible, making sure that key people in their organisation “buy in” to the updated approach. This article looks at the new regulations and what brokers can do to prepare for them.

23/03/17 HT 2017- 04 FCA proposals for implementing the Insurance distribution Directive

The UK is required to comply by 23 February 2018 with the Insurance Distribution Directive (IDD), which has a much broader scope than the Directive it replaces, the Insurance Mediation Directive (IMD). This article looks at the changes to UK regulatory rules and guidance proposed by the FCA to implement the directive, including changes to the training and competence and conduct of business requirements.

02/03/17 HT 2017- 03 Renewal Transparency

The new renewal transparency rules – involving disclosure of the previous year’s premium and a statement to encourage customers to shop around – apply both to intermediaries and insurers issuing renewal invitations to consumers on or after 1April 2017. This article takes a close look at the rules and sets out some FAQs to assist firms with implementation.

22/02/17 HT 2017- 02 Client Money rules & update

Although the FCA decided not to proceed with the changes to the rules in CASS 5, proposed in 2012, insurance intermediaries cannot be complacent. The existing client money requirements remain very much in force and the FCA has enhanced its monitoring in this area. New data is being obtained through firms’ regulatory returns and new standards for Client Assets Audits have been introduced. This article revisits the client money rules for insurance intermediaries and looks at the way they are now being monitored.

09/01/17 HT 2017- 01 Brokers’ PII arrangements in the regulatory spotlight

Following a study of the professional indemnity insurance arrangements of around 200 insurance intermediaries, the FCA has raised concerns over the scope and accuracy of some policies. The review established that the capacity within the PII market was good but some of the contracts examined contained exclusion clauses which could reduce the scope of the cover below that required by the rules and some carried a policy excess greater than that permitted. The FCA also found a high level of inaccuracies in policy wordings, especially around the cover for Financial Ombudsman awards and for any appointed representatives.