COMP 5.7 21Protected non-investment insurance distribution

COMP 5.7.2R

COMP 5.7.1 R only applies if the conditions in (1) and (2) are satisfied:3

1
  1. (1)

    the protected non-investment insurance distribution7 was carried on from:3

    3
    1. (a)

      an establishment of the relevant person in the United Kingdom; or3

    2. (b)

      a branch of a UK firm4 established in another EEA State in the exercise of an EEA right derived from the IDD7; and3

      4
  2. (2)

    the claimant making the claim (or where COMP 3.2.4 R applies, the customer on behalf of whom a firm makes a claim) dealt initially, with a view to entering into a relevant general insurance contract or a pure protection contract but not a long-term care insurance contract or a reinsurance contract, with an intermediary that was:4

    34
    1. (a)

      established in the United Kingdom; or4

      4
    2. (b)

      a branch of a UK firm established in another EEA State in the exercise of an EEA right derived from the IDD7.4

      4
COMP 5.7.3G

4The FSCS will not cover a claim against an intermediary 5or a successor of an intermediary 5that meets the criteria of either COMP 5.7.2 R (2)(a) or COMP 5.7.2 R (2)(b) where the claimant was introduced to that intermediary by an intermediary that does not meet the criteria of either COMP 5.7.2 R (2)(a) or COMP 5.7.2 R (2)(b).

COMP 5.7.4G

4The FSCS will not cover a claim in respect of an intermediary that is not a relevant person, for example a retailer selling extended warranties that are connected contracts. However, COMP 5.7.2 R has the effect that a claim in respect of a relevant person further up the chain carrying on protected non-investment insurance distribution7 in accordance with COMP 5.7.2 R (1)(a) may be covered by the FSCS if the claimant dealt initially with a UK intermediary that is not a relevant person.

Advising without a personal recommendation

COMP 5.7.5R

6The FSCS must treat a claim relating to advice on a relevant general insurance contract or a pure protection contract (which is not a long-term insurance contract or a reinsurance contract) that falls outside article 53(1) of the Regulated Activities Order by virtue of article 53(1A) of that Order as being ‘in connection with protected non-investment insurance business’ for the purposes of COMP 5.2.1R(5) where the relevant person giving the advice, at the time the act or omission giving rise to the claim took place:

  1. (1)

    had, or required, permission to carry on; or

  2. (2)

    (in the case of an appointed representative) was exempt from the general prohibition in respect of,

an activity that was non-investment insurance business.