AUTH App 5.13 Appointed representatives
What is an appointed representative?
Section 39 of the Act (Exemption of appointed representatives) exempts appointed representatives from the need to obtain authorisation. An appointed representative is a person who is party to a contract with an authorised person which permits or requires him to carry on certain regulated activities (see Glossary for full definition). SUP 12 (Appointed representatives) contains rules and guidance relating to appointed representatives.
A person who is an authorised person cannot be an appointed representative (see section 39(1) of the Act (Exemption of appointed representatives)).
Business for which an appointed representative is exempt
An appointed representative can carry on only those regulated activities which are specified in the Appointed Representatives Regulations. With effect from 14 January 2005, the regulated activities set out in the table in AUTH App 5.13.4 G will be included in those regulations. As set out in the table, the insurance mediation activities that can be carried on by an appointed representative differ depending on the type of contracts of insurance in relation to which the activities are carried on.
Insurance mediation activities able to be carried on by an appointed representative. This table belongs to AUTH App 5.13.3 G2
Type of contract of insurance |
Regulated activities an appointed representative can carry on |
•Dealing in investments as agent; •Assisting in the administration and performance of a contract of insurance; •Advising on investments; and • Agreeing to carry on these regulated activities. |
|
Pure protection contract |
•Dealing in investments as agent (but only where the contract is not a long-term care insurance contract);2 •Assisting in the administration and performance of a contract of insurance;2 •Advising on investments; and • Agreeing to carry on these regulated activities. |
Life policy (note that this already has effect prior to 14 January 2005) |
•Assisting in the administration and performance of a contract of insurance;2 •Advising on investments; and • Agreeing to carry on these regulated activities |
Persons who are not already appointed representatives
A person who is not already an appointed representative may wish to become one in relation to the regulated activities specified in the Appointed Representatives Regulations (see table in AUTH App 5.13.4 G). If so, he must be appointed under a written contract by an authorised person, who has permission to carry on those regulated activities and who accepts responsibility for the appointed representative's actions when acting for him. SUP 12.4 (What must a firm do when it appoints an appointed representative?) and SUP 12.5 (Contracts: required terms) set out the detailed requirements that must be met for an appointment to be made. In particular, an appointed representative will not be able to commence an insurance mediation activity until he is included on the FSA Register for such activities.
Persons who are already appointed representatives
Where a person is already an appointed representative and he proposes to carry on, with effect from 14 January 2005, any insurance mediation activities, he will need to consider the following matters.
- (1)
He must become authorised if his proposed insurance mediation activities include activities that do not fall within the table in AUTH App 5.13.4 G (for example, dealing as agent in pure protection contracts) and he wishes to carry on these activities. The Act does not permit any person to be exempt for some activities and authorised for others. He will, therefore, need to apply for permission to cover all the regulated activities that he proposes to carry on from 14 January 2005.
- (2)
If he proposes to carry on other regulated activities specified in the Appointed Representatives Regulations in relation to contracts of insurance (see the table in AUTH App 5.13.4 G), he may be able to do so as an appointed representative bearing in mind the following.
- (a)
He will need to be appointed by an authorised person prepared to accept responsibility for his insurance mediation activities when acting for him. The authorised person must have permission to carry on these regulated activities.
- (b)
If these insurance mediation activities are to be carried on for the same authorised person who has already appointed him for his other regulated activities, the contract between them will need to be amended to reflect the additional activities. Other amendments to the contract will be required (see SUP 12.5.6A R).
- (c)
The effect of amendments to the Appointed Representatives Regulations is that an appointed representative cannot commence an insurance mediation activity until he is included on the FSA Register as carrying on such activities.
- (d)
An appointed representative would be entitled to have more than one principal subject to certain restrictions. In relation to non-investment insurance contracts (general insurance contracts and pure protection contracts), an appointed representative may have an unlimited number of principals. In relation to regulated mortgage contracts and designated investment business, an appointed representative is limited in the number of principals he may have. In any case where an appointed representative has multiple principals, those principals are required to enter into a multiple- principal agreement (see SUP 12.4.5D G to SUP 12.4.5G G (Appointment of an appointed representative (other than an introducer appointed representative)).
- (e)
If the activities of the appointed representative are limited to introducing, he should consider the specific Handbook provisions relating to introducer appointed representatives (see SUP 12 (What must a firm do when it appoints an appointed representative?)).
- (a)