A statement of the demands and needs must be communicated to the client prior to the conclusion of a life policy.
[Note: first paragraph of article 20(1) and article 20(2) of the IDD]
1Firms are reminded that they are obliged to take reasonable steps to ensure that a personal recommendation is suitable for, and consistent with the insurance demands and needs of, the client and that, whenever a personal recommendation relates to a life policy, a suitability report is required (see COBS 9 or 9A).
1Where an insurance distributor is distributing through a person relying on the connected contracts exemption in article 72B of the Regulated Activities Order, the insurance distributor must ensure that the requirements in (2) are met.
The requirements referred to in (1) are:
SYSC 19F.2 (Remuneration and insurance incentives)
COBS 4 (Communicating with clients, including fair financial promotions);
COBS 2.1.1R (client’s best interests);
COBS 6.1ZA.7AR(1)(a) and (c) (Status disclosure general information: insurance distribution);
[Note: article 1(4) of the IDD]