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Status: You are viewing the version of the handbook as on 2005-06-30.

COB 6.8 Insurance contracts: life policies

Application

COB 6.8.1R

COB 6.8 applies to a firm which effects or carries outlife policies8. 1

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Purpose

COB 6.8.2G
  1. (1)

    Principle 7 (Communications with clients) requires a firm to pay due regard to the information needs of its clients. This section reinforces Principle 7 by requiring certain information to be provided on a continuing basis to a client with a life policy. (COB 6.1 to COB 6.5 deal with pre-sale information for life policies). 5

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  2. (2)

    This section implements certain requirements of the Third Life Directive.48

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  3. (3)

    For non-investment insurance contracts8, firmsshould refer to ICOB.8

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COB 6.8.3R

[Deleted]8

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COB 6.8.4R

[Deleted]8

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8L8ife policies: Information to be provided during the term of the contract

COB 6.8.5R

[Deleted]51

COB 6.8.6R

COB 6.8.7 R and COB 6.8.8 R apply to a long-term insurer, unless, at the time of application, the client, other than an EEA ECA recipient, was habitually resident:

  1. (1)

    in an EEA State other than the United Kingdom; or

  2. (2)

    outside the EEA and he was not present in the United Kingdom.135

COB 6.8.7R

If during the term of a life policy entered into on or after 1 July 1994 there is any proposed change in the information referred to in COB 6.5.49 R items (1) to (12), the long-term insurer must inform the policyholder of the effect of the change before the change is made.15

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COB 6.8.8R

If a life policy entered into on or after 1 July 1994 provides for the payment of bonuses and the amounts of bonuses are unspecified, the long-term insurer must, in every calendar year except the first, either:

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  1. (1)

    notify the policyholder in writing of the amount of any bonus which has become payable under the contract, and which has not previously been notified under this rule; or

  2. (2)

    give the policyholder in writing sufficient information to enable him to determine the amount of any such bonus.12

COB 6.8.9G

The information under COB 6.8.8 R (2) could include the total value of the benefits (including bonuses) which have accrued under the contract, the rates of bonus which have been declared since the previous notification or provision of information and a note of the benefits to which those new rates should be applied.

COB 6.8.10G

Although COB 6.8.8 R does not apply to a bonus if the amount is specified in the contract, long-term insurers are free to provide the information if they wish.

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COB 6.8.11G

[Deleted]8

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COB 6.8.12R

[Deleted]8

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COB 6.8.13R

[Deleted]8

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COB 6.8.13AR

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COB 6.8.14G

[Deleted]8

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Provision of information: general

COB 6.8.15R
  1. (1)

    When a firm provides information in accordance with COB 6.8.3 R, COB 6.8.7 R, COB 6.8.8 R or COB 6.8.12 R, it must provide the information in writing, unless (2) applies.

  2. (2)

    If the contract is being made by telephone, the firm may give the information orally to the customer. If the customer enters into the contract, a written version of the required information must be sent to the customer within five business days of the contract being entered into.1

COB 6.8.16G

In relation to electronic notification, firms are referred to the guidance in COB 1.8 (Application to electronic media).

COB 6.8.17R

Where a life policyis effected jointly, the information required by COB 6.8.7 R or 8COB 6.8.8 R may be sent to the first named customer.1

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Record keeping

COB 6.8.18R

A firm must make an adequate record of information provided to a customer under COB 6.8 and retain that record for a minimum period after the information is provided of six years.8

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