ICOB 2
General
rules (including unfair inducements)
ICOB 2.1
Application: who?
- 14/01/2005
ICOB 2.1.1
See Notes
- (1) This chapter applies to:
- (a) an insurer;
- (b) an insurance intermediary;
- (c) a managing agent.
- (2) ICOB 2.3, ICOB 2.4, ICOB 2.5, ICOB 2.6, ICOB 2.7 and ICOB 2.8 apply to a firm that communicates or approves a non-investment financial promotion to which ICOB 3 applies.
- 14/01/2005
ICOB 2.2
Communication
- 14/01/2005
ICOB 2.2.1
See Notes
- 14/01/2005
Clear, fair and not misleading communication
ICOB 2.2.3
See Notes
- (1) When a firm communicates information to a customer, it must take reasonable steps to communicate in a way that is clear, fair and not misleading.
- (2) Paragraph (1) does not apply to a firm when it communicates a non-investment financial promotion in circumstances in which ICOB 3(Financial promotion) applies to the firm.
- 14/01/2005
ICOB 2.2.4
See Notes
- 14/01/2005
ICOB 2.2.5
See Notes
- 14/01/2005
ICOB 2.2.6
See Notes
- 14/01/2005
ICOB 2.2.7
See Notes
A firm should make every effort to ensure that information is presented clearly, fairly and in a way that does not mislead, whether it is to be viewed as a hard copy, as an electronic document on screen or presented on some other medium (such as audio-tape for visually-impaired customers). A firm should:
- (1) use materials and design (including paper size, colour, font type and font size, tone and volume) to present the information legibly and accessibly, and in a balanced way;
- (2) use emphasis sparingly; and
- (3) not use differential font sizes or positioning so that the impact on a customer of some information (e.g. significant conditions, exclusions from the scope of cover or charges made to customers) is likely to be materially less than other provisions, parts or pages of the document.
- 14/01/2005
ICOB 2.2.8
See Notes
- 14/01/2005
ICOB 2.3
Inducements
- 14/01/2005
ICOB 2.3.1
See Notes
- 14/01/2005
ICOB 2.3.2
See Notes
A firm must take reasonable steps to ensure that it, and any person acting on its behalf, does not:
- (1) offer, give, solicit or accept an inducement; or
- (2) direct or refer any actual or potential business in relation to an insurance mediation activity to another person on its own initiative or on the instructions of an associate;
- 14/01/2005
ICOB 2.3.3
See Notes
- 14/01/2005
ICOB 2.3.4
See Notes
- 14/01/2005
ICOB 2.3.5
See Notes
ICOB 2.3.2 R does not prevent a firm:
- (1) assisting an insurance intermediary so that the quality of the insurance intermediary's service to customers is enhanced; or
- (2) giving or receiving indirect benefits (such as gifts, hospitality or promotional competition prizes);
- 14/01/2005
ICOB 2.3.6
See Notes
- 14/01/2005
ICOB 2.3.7
See Notes
- (1) ICOB 2.3.2 R states that an inducement will only be considered unfair if it conflicts to a material extent with any duty that the firm owes to its customers. This means that the circumstances surrounding an inducement may determine whether or not it is unfair. It is a firm's responsibility to determine this.
- (2) A firm that is offered an inducement should consider whether accepting that inducement might cause it, or any person acting on its behalf, to act in a way which conflicts with the duty that the firm owes to its customers.
- 14/01/2005
ICOB 2.3.8
See Notes
- (1) Inducements that operate at a distance from the sales process may not be unfair, if they do not have an effect on the sales person's selling of a particular product.
- (2) Incentives offered to staff should not encourage sales staff to sell products unsuited to customers' needs.
- 14/01/2005
ICOB 2.3.9
See Notes
- 14/01/2005
ICOB 2.4
Reliance on others
- 14/01/2005
ICOB 2.4.1
See Notes
- 14/01/2005
ICOB 2.4.2
See Notes
- 14/01/2005
ICOB 2.4.3
See Notes
- (1) In relying on ICOB 2.4.2 R, a firm should take reasonable steps to establish that the other person providing written information:
- (a) either:
- (2) Compliance with (1) may be relied on as tending to establish compliance with ICOB 2.4.2 R.
- (3) Contravention of (1) may be relied on as tending to establish contravention of ICOB 2.4.2 R.
- 14/01/2005
ICOB 2.4.4
See Notes
- (1) Any information which a rule in ICOB requires to be sent to a customer may be sent to another person on the instruction of the customer.
- (2) There is no need for a firm to supply information to a customer where it has taken reasonable steps to establish that this has been or will be supplied by another person.
- 14/01/2005
ICOB 2.5
Exclusion of liability
- 14/01/2005
ICOB 2.5.1
See Notes
- 14/01/2005
ICOB 2.5.2
See Notes
- 14/01/2005
ICOB 2.5.3
See Notes
- 14/01/2005
ICOB 2.6
Application to electronic media
- 14/01/2005
ICOB 2.6.1
See Notes
- 01/11/2007
ICOB 2.6.2
See Notes
For any electronic communication with a customer in relation to a non-investment insurance contract, a firm should:
- (1) have in place appropriate arrangements, including contingency plans, to ensure the secure transmission and receipt of the communication; it should also be able to verify the authenticity and integrity of the communication, together with the date and time sent and received; the arrangements should be proportionate and take into account the different levels of risk in a firm's business;
- (2) be able to demonstrate that the customer wishes to communicate using this medium; and
- (3) if entering into an agreement, make it clear to the customer that a contractual relationship is created that has legal consequences.
- 14/01/2005
ICOB 2.6.3
See Notes
- 14/01/2005
ICOB 2.6A
E-Commerce
- 01/11/2007
Application
ICOB 2.6A.1
See Notes
- 01/11/2007
Information about the firm and its products or services
ICOB 2.6A.2
See Notes
A firm must make at least the following information easily, directly and permanently accessible to the recipients of the information society services it provides:
- (1) its name;
- (2) the geographic address at which it is established;
- (3) the details of the firm, including its e-mail address, which allow it to be contacted rapidly and communicated with in a direct and effective manner;
- (4) an appropriate statutory status disclosure statement (GEN 4 Annex 1 R), together with a statement which explains that it is on the FSA register and includes its FSA register number;
- (5) if it is a professional firm, or a person regulated by the equivalent of a designated professional body in another EEA State:
- (a) the name of the professional body (including any designated professional body) or similar institution with which it is registered;
- (b) the professional title and the EEA State where it was granted;
- (c) a reference to the applicable professional rules in the EEA State of establishment and the means to access them; and
- (6) where the firm undertakes an activity that is subject to VAT, its VAT number.
[Note: article 5(1) of the E-Commerce Directive]
- 01/11/2007
ICOB 2.6A.3
See Notes
If a firm refers to price, it must do so clearly and unambiguously, indicating whether the price is inclusive of tax and delivery costs.
[Note: article 5(2) of the E-Commerce Directive]
- 01/11/2007
ICOB 2.6A.4
See Notes
A firm must ensure that commercial communications which are part of, or constitute, an information society service, comply with the following conditions:
- (1) the commercial communication must be clearly identifiable as such;
- (2) the person on whose behalf the commercial communication is made must be clearly identifiable;
- (3) promotional offers must be clearly identifiable as such, and the conditions that must be met to qualify for them must be easily accessible and presented clearly and unambiguously; and
- (4) promotional competitions or games must be clearly identifiable as such, and the conditions for participation must be easily accessible and presented clearly and unambiguously.
[Note: article 6 of the E-Commerce Directive]
- 01/11/2007
ICOB 2.6A.5
See Notes
An unsolicited commercial communication sent by e-mail by a firm established in the United Kingdom must be identifiable clearly and unambiguously as an unsolicited commercial communication as soon as it is received by the recipient.
[Note: article 7(1) of the E-Commerce Directive]
- 01/11/2007
Requirements relating to the placing and receipt of orders
ICOB 2.6A.6
See Notes
A firm must (except when otherwise agreed by parties who are not consumers):
- (1) give an ECA recipient at least the following information, clearly, comprehensibly and unambiguously, and before the order is placed by the recipient of the service:
- (a) the different technical steps to follow to conclude the contract;
- (b) whether or not the concluded contract will be filed by the firm and whether it will be accessible;
- (c) the technical means for identifying and correcting input errors before the placing of the order; and
- (d) the languages offered for the conclusion of the contract;
- (2) indicate any relevant codes of conduct to which it subscribes and information on how those codes can be consulted electronically;
- (3) (when an ECA recipient places an order through technological means), acknowledge the receipt of the recipient's order without undue delay and by electronic means (an order and an acknowledgement of receipt are deemed to be received when the parties to whom they are addressed are able to access them); and
- (4) make available to an ECA recipient, appropriate, effective and accessible technical means allowing the recipient to identify and correct input errors before the placing of an order.
[Note: articles 10(1) and (2) and 11(1) and (2) of the E-Commerce Directive]
- 01/11/2007
ICOB 2.6A.7
See Notes
Contractual terms and conditions provided by a firm to an ECA recipient must be made available in a way that allows the recipient to store and reproduce them.
[Note: article 10(3) of the E-Commerce Directive]
- 01/11/2007
Exception: contract concluded by e-mail
ICOB 2.6A.8
See Notes
The requirements relating to the placing and receipt of orders do not apply to contracts concluded exclusively by exchange of e-mail or by equivalent individual communications.
[Note: article 10(4) and 11(3) of the E-Commerce Directive]
- 01/11/2007
ICOB 2.7
General provision related to distance contracts
- 14/01/2005
ICOB 2.7.1
See Notes
During the course of a distance contract with a retail customer, the making of which constitutes or is part of a non-investment insurance contract:
- (1) the firm must, at the retail customer's request, provide a paper copy of the contractual terms and conditions of the non-investment insurance contract; and
- (2) the firm must comply with the retail customer's request to change the means of distance communication used, unless this is incompatible with the non-investment insurance contract concluded or the service being provided by the firm.
- 01/11/2007
ICOB 2.7.2
See Notes
- 14/01/2005
ICOB 2.8
Record keeping
- 14/01/2005
ICOB 2.8.1
See Notes
- 14/01/2005
ICOB 2.8.2
See Notes
- 14/01/2005
ICOB 2.8.3
See Notes
- 14/01/2005
ICOB 2.8.4
See Notes
- 14/01/2005
ICOB 2.8.5
See Notes
- (1) A firm may arrange for records to be kept in such form as it chooses provided the record is readily accessible for inspection by the FSA.
- (2) Where a firm chooses to maintain records in electronic form, it should take reasonable steps to ensure that:
- (a) the electronic record accurately records the original information; and
- (b) the electronic record cannot be subject to unauthorised or accidental alteration.
- 14/01/2005
ICOB 2.8.6
See Notes
- 14/01/2005
ICOB 2.9
Communications with customers
- 14/01/2005
ICOB 2.9.1
See Notes
- 14/01/2005
ICOB 2.10
Excessive charges to retail customers
- 06/03/2006
ICOB 2.10.1
See Notes
- 06/03/2006
ICOB 2.10.2
See Notes
When determining whether a charge is excessive, an insurance intermediary should consider:
- (1) the amount of its charges for the services or product in question, compared with charges for similar services or products in the market;
- (2) whether the charges are an abuse of the trust that the retail customer has placed in the insurance intermediary; and
- (3) the nature and extent of the disclosure of the charges to the retail customer.
- 06/03/2006
ICOB 2.10.3
See Notes
- 06/03/2006
ICOB 2.10.4
See Notes
- 06/03/2006