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.

25/06/18 HT 2018-08 FCA Business Plan

The priorities in the FCA’s latest Business Plan reflect the variety of changes affecting both financial services and the wider society. The plan sets out how the FCA plans to use its resources to tackle the challenges posed by rapidly evolving user needs and the heightened uncertainty in the economic and political outlook. This article looks at the plan and, in particular, the areas of focus for the general insurance sector.

08/06/18 HT 2018-07 Renewal Transparency Revisited

While continuing to monitor how the renewal transparency rules have been implemented, the FCA has started to look into renewal pricing, in particular the issue of dual-pricing. This article revisits the renewal transparency rules, considers the FCA’s concerns over the way firms are implementing them and looks as how the momentum to ensure customers get a fair deal at renewal is increasing.

09/05/18 HT 2018-06 GDPR Marketing

Marketing to individuals – whether postal, phone, e-mail, text or in any other form – is regulated along with other data processing activities and firms will have to show that they have a lawful basis for such activity. This article aims to explain the effects of the GDPR and PECR on marketing by insurance intermediaries, based on ICS’s current understanding of the requirements. It includes links to relevant guidance from the Information Commissioner’s Office (ICO) as well as a summary table setting out the main requirements.

28/03/18 HT 2018-05 GDPR Practical Matters

In this article we set out a provisional change to our template Terms of Business Agreement (TOBA) to take into account the GDPR and a Q&A session which aims to shed light on some of the practical issues, including consent.

20/03/18 HT 2018-04 IDD – FCA Policy Statement – 18/1

In January this year, the FCA issued its third policy statement (PS 18/1) on the implementation of the Insurance Distribution Directive (IDD). The government has subsequently announced a change to the date of implementation. Once ratified by the European Authorities and relevant UK legislation, the effective date of the new rules will be 1 October 2018 (rather than 23 February 2018). This gives intermediaries, insurers and software providers more time to make the necessary changes. This article concentrates on the content of the PS relevant to the role of general insurance intermediaries, with particular regard to conflicts of interest, product oversight and governance and perimeter guidance.

14/02/18 HT 2018-03 The GDPR train fast approaching

The EU General Data Protection Regulation (GDPR) marks the most significant change to data privacy regulation since the Data Protection Act of 1998. If you are not already aware, the GDPR enforcement date is fast approaching – 25 May 2018. That deadline is not going to be extended.

15/01/18 HT 2018-02 IDD – Product Oversight and Governance

This is the third in a series of Hot TopICS concerning the details of the forthcoming changes that will affect, amongst others, general insurance intermediaries as a result of the Insurance Distribution Directive (IDD). This article looks at the IDD requirements on Product Oversight and Governance (POG) and the FCA proposals to implement them.

03/01/18 HT 2018-01 Wholesale Insurance Broker Market Study – Terms of Reference

The FCA has issued the Terms of Reference (ToR) in relation to a new market study (MS17 2.1) which will enable it to effectively assess whether the wholesale insurance broker sector is working to provide appropriate outcomes in the markets in which it operates. This is in line with part of the FCA’s 2017/2018 mission, which states:
“ …. We want to ensure that wholesale markets demonstrate open access, transparency, integrity and competition on merits.”

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.