COMP 5.7 21Protected non-investment insurance distribution
Protected non-investment insurance distribution is an insurance distribution activity7 where the investment concerned is a relevant general insurance contract or a pure protection contract but3 which is not a long-term care insurance contract or a 3reinsurance contract, provided that the conditions4 in COMP 5.7.2 R are4 satisfied.12
344COMP 5.7.1 R only applies if the conditions in (1) and (2) are satisfied:3
1- (1)
the protected non-investment insurance distribution7 was carried on from an establishment of the relevant person in the United Kingdom; and 8
33 - (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 established in the United Kingdom.8
344
4The FSCS will not cover a claim against an intermediary 5or a successor of an intermediary 5that meets the criteria of COMP 5.7.2R(2)8 where the claimant was introduced to that intermediary by an intermediary that does not meet the criteria of COMP 5.7.2R(2)8.
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 5.7.2R(1)8 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
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)
had, or required, permission to carry on; or
- (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.