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ICOB 5.5 Information form and content

Policy summary

ICOB 5.5.1R

A policy summary must contain only:

  1. (1)

    the information specified in ICOB 5.5.5 R in relation to a non-investment insurance contract; and

  2. (2)

    at the option of the insurer or insurance intermediary:

    1. (a)

      all or part of the information in ICOB 5.5.14 R (Statement of price);

    2. (b)

      for any applicable compensation scheme mentioned in ICOB 5.5.5 R(12), the extent and level of cover and how further information can be obtained; and

    3. (c)

      the information on cancellation in ICOB 5.3.12 R.

ICOB 5.5.2R

A policy summary, if not set out in a separate document, must be:

  1. (1)

    in a prominent place within the other document and clearly identifiable as key information that the retail customer should read; and

  2. (2)

    separate from the other content of the document in which it is included.

ICOB 5.5.3G
  1. (1)

    A policy summary is a generic document, but the information in ICOB 5.5.5 R can be personalised if the insurer or insurance intermediary wishes, with the details applicable to the insurance cover being provided for a particular retail customer.

  2. (2)

    A policy summary should be produced as an informative document. It is not intended to communicate the full terms and conditions of a non-investment insurance contract to the retail customer. The content should properly describe the contract but should not overload the retail customer with detail.

Key features as an alternative to a policy summary

ICOB 5.5.4R

A firm may provide key features that meet the requirements of COB 6 on the content of the key features, instead of a policy summary. The key features must include the information required in ICOB 5.5.5 R(6), (10) and (13) (cross-references from significant and unusual exclusions or limitations to related sections of the policy document, a telephone number or address for notification of claims and the key facts logo), in addition to that required by COB 6, but this rule does not require a firm to meet the requirements of COB 6.5.12R or COB 6.5.38R.2

ICOB 5.5.5R

Policy summary content. This table belongs to ICOB 5.5.1 R.

Policy summary content

(1)

a statement that the policy summary does not contain the full terms and conditions of the non-investment insurance contract, which can be found in the policy document;

(2)

name of the insurance undertaking;

(3)

type of insurance and cover;

(4)

significant features and benefits;

(5)

significant and unusual exclusions or limitations;

(6)

cross-references from (5) to the related sections of the policy document;

(7)

the duration of the non-investment insurance contract;

(8)

(for policies of more than one year), a statement, where relevant, that the retail customer may need to review and update his cover periodically to ensure it remains adequate;

(9)

the existence or absence of the right of cancellation and, where applicable, the duration of the cancellation period;

(10)

a telephone number or address to which a claim may be notified;

(11)

how to complain to the insurance undertaking and that complaints may subsequently be referred to the Financial Ombudsman Service or any other applicable named complaints scheme;

(12)

that, should the insurance undertaking be unable to meet its liabilities, the retail customer may be entitled to compensation from the compensation scheme, or from any other applicable named compensation scheme, or that there is no compensation scheme; and1

(13)

the key facts logo.

ICOB 5.5.6G

When producing the information in ICOB 5.5.5 R a firm should have regard to the nature and complexity of the non-investment insurance contract in deciding:

  1. (1)

    how much detail the policy summary should contain; and

  2. (2)

    what constitutes a significant or unusual exclusion or limitation.

ICOB 5.5.7G

The requirement in ICOB 5.5.5 R(3) (type of insurance and cover) can be met in the following ways:

  1. (1)

    by describing the broad type of non-investment insurance contract, for example:

    1. (a)

      for motor insurance, whether the cover is comprehensive or third party;

    2. (b)

      for household insurance, whether accidental damage is included; and

    3. (c)

      for a pure protection contract, whether the premium is guaranteed, reviewable or renewable; or

  2. (2)

    if a policy summary provided to a retail customer in a durable medium describes different types of cover available, for example, both comprehensive and third party motor insurance, the retail customer should be informed which type of cover is being offered at the time he is given the policy summary.

ICOB 5.5.8G

A significant exclusion or limitation is one that would tend to affect the decision of retail customers generally to buy. In determining what exclusions or limitations are significant an insurer should, in particular, consider the exclusions or limitations that relate to the significant features and benefits in ICOB 5.5.5 R(4). Another type of significant limitation might be that the contract only operates through certain means of communication e.g. telephone or Internet.

ICOB 5.5.9G

An unusual exclusion or limitation is one that is not normally found in comparable contracts.

ICOB 5.5.10G

Some examples of significant andunusual exclusions or limitations are as follows:

  1. (1)

    for non-investment insurance contracts that are pure protection contracts or medical insurance: deferred payment periods; exclusion of certain conditions or diseases; exclusion of pre-existing medical conditions, and moratorium periods;

  2. (2)

    for general insurance contracts: "high risk" electrical items from a household policy; audio equipment from motor insurance; winter sports from travel insurance; and

  3. (3)

    for all types of non-investment insurance contracts: limits on the amounts of cover; limits on the period for which benefits will be paid; restrictions on eligibility to claim such as age or employment status; excesses.

ICOB 5.5.11R

The key facts logo must be included in a prominent position at the top of the policy summary, as shown in ICOB 4 Annex 1 for the initial disclosure document, or in a prominent position at the top of the relevant section of the document if the policy summary information is included in another document. The logo may be a different size from that in ICOB 4 Annex 1 but its proportions must not be distorted.

ICOB 5.5.12G

The FSA has developed a common 'key facts' logo to be used on significant pieces of information directed to customers. When reproducing the logo, insurers and insurance intermediaries may use colour, providing this does not diminish the prominence of the logo. A specimen of the 'key facts' logo can be obtained from the FSA website: http://www.fsa.gov.uk/pubs/other/Key facts_logo.

ICOB 5.5.13G

A firm should produce a policy summary to a standard of quality and presentation consistent with that used for other documents in relation to the non-investment insurance contract, so that retail customers are not deterred by its appearance from reading it.

Statement of price

ICOB 5.5.14R

A statement of price must include the following information:

  1. (1)

    the total amount of the premium for the non-investment insurance contract or, if the premium cannot be indicated, the basis for the calculation of the premium enabling the retail customer to verify it;

  2. (2)

    for non-investment insurance contracts of more than one year, details of the period for which the premium is valid, whether it will be reviewed at a certain time or at set periods and, if so, when it will be reviewed;

  3. (3)

    fees, administrative charges and taxes payable by the retail customer via the insurance intermediary in addition to the premium. Fees and administrative charges include any interest payable on the premium, including where the premium is paid by way of a credit agreement taken out either for payment of the premium only or for the purpose of purchasing goods or services as well;

  4. (4)

    a statement identifying separately the possibility of any taxes not payable via the insurance intermediary;

  5. (5)

    where the non-investment insurance contract is purchased in connection with other goods or services:

    1. (a)

      the premium for the non-investment insurance contract, separately from all other prices in relation to the other goods or services, if an additional price is charged; and

    2. (b)

      whether purchase of the non-investment insurance contract is a requirement of purchasing the other goods or services or not; and

  6. (6)

    the total price to be paid by the retail customer for the non-investment insurance contract.

ICOB 5.5.14AR

2Where an exact amount, required to be included in a statement of price in accordance with ICOB 5.5.14 R, cannot be indicated, the statement of price must show the basis for calculation of the amount enabling the retail customer to verify it.

ICOB 5.5.14BG

2A firm may only show the basis of calculation (in accordance with ICOB 5.5.14A R) if it is not possible to show an exact amount. So ICOB 5.5.14A R will not apply where, for example, a creditor insurance policy is financed by means of a loan agreement and it is possible to state the total amount payable in accordance with the requirements under the Consumer Credit Act 1974 to show the total price. In such cases ICOB 5.5.14 R (3) requires the interest payable on the premium to be stated, and ICOB 5.5.14 R (6) requires the total price to be stated.

ICOB 5.5.15G

An example of a situation where a premium could not be stated under ICOB 5.5.14 R(1) is a creditor insurance policy where the premium varies according to the level of debt. The statement of price should instead show the basis of calculation, for example, the premium as a percentage of the debt outstanding at specified dates.

ICOB 5.5.15AG

2If the non-investment insurance contract contains optional elements of cover, the total amount of premium, or the basis for the calculation of the premium, required under ICOB 5.5.14 R(1) should include all optional elements of cover selected by the retail customer.1

Directive-required information

ICOB 5.5.16R

The directive-required information referred to in this chapter is set out in ICOB 5.5.20 R, subject to ICOB 5.5.18 R to ICOB 5.5.19 R.

ICOB 5.5.17G

ICOB 5.5.20 R brings together all the directive-required information that must be provided under this chapter. Where information required under ICOB 5.5.20 R has already been provided to a customer in another document, for example a policy summary, it does not need to be provided a second time for the same contract unless required by a specific rule. In some instances it may be possible to meet similar requirements of more than one directive by a single statement, including requirements in ICOB 4.

ICOB 5.5.18R

The information in ICOB 5.5.20 R(2) and (3) need not be provided for a general insurance contract, if the United Kingdom is not the State of the risk.

ICOB 5.5.19R
  1. (1)

    The information in (2) need not be provided for a non-investment insurance contract which is a pure protection contract if, at the time of application, the customer, other than an EEA ECA recipient, is habitually resident:

    1. (a)

      in an EEA State other than the United Kingdom; or

    2. (b)

      outside the EEA and he is not present in the United Kingdom.

  2. (2)

    The information referred to in (1) is:

    1. (a)

      ICOB 5.5.20 R(4) to (15); or

    2. (b)

      ICOB 5.5.20 R(22), if the non-investment insurance contract was entered into before 1 July 1994.

ICOB 5.5.20R

Directive-required information to be provided to customers. This table belongs to ICOB 5.5.16 R.

Directive-required information to be provided to customers

For general insurance contracts (Third Non-Life Directive) other than certain1distance contracts with retail customers:

(1)

if the insurance undertaking is an EEA firm:

(a)

the insurance undertaking's Home State and, where appropriate, the EEA State of the branch through which the non-investment insurance contract is to be concluded2; and

(b)

the address of the insurance undertaking's head office (and branch, if appropriate)2;

(2)

if the policyholder is a natural person, the law applicable to the general insurance contract where the parties do not have a free choice, or the fact that the parties are free to choose the law applicable and, in the latter case, the law the insurance undertaking proposes to choose; and

(3)

if the policyholder is a natural person, the arrangements for handling policyholder's complaints concerning general insurance contracts including, where appropriate, the existence of a complaints body, without prejudice to the policyholder's right to take legal proceedings.

Note 1: The information at (1) to (3) need not be provided for distance contracts where information is provided under the Distance Marketing Directive.

Note 2: The information in (1) must be stated in the policy document and any other document granting cover.

For non-investment insurance contracts that are pure protection contracts(Consolidated Life Directive)3 other than certain 4 distance contracts with retail customers:

(4)

the name and legal form of the insurance undertaking;

(5)

the name of the EEA State in which the head office of the insurance undertaking and, where appropriate, the agency or branch concluding the non-investment insurance contract is situated;

(6)

the address of the insurance undertaking's head office and, where appropriate, of the agency or branch concluding the non-investment insurance contract;

(7)

the definition of each benefit and each option;

(8)

the term of the non-investment insurance contract;

(9)

the means of terminating the non-investment insurance contract;

(10)

the means of payment of premiums and duration of payments;

(11)

information on the premiums for each benefit, both main benefits and supplementary benefits, where appropriate;

(12)

information about cancellation in accordance with ICOB 5.3.21 R;

(13)

general information on the tax arrangements applicable to the type of non-investment insurance contract;

(14)

the arrangements for handling complaints concerning non-investment insurance contracts by policyholders, lives assured or beneficiaries underpolicies, including, where appropriate, the existence of a complaints body, making clear that its existence is without prejudice to the right to take legal proceedings; and

(15)

the law applicable to the non-investment insurance contract where the parties do not have a free choice or, if the parties are free to choose the law applicable, the law the insurance undertaking proposes to choose.

Note 3: The directive-required information at (4) to (15) must be in English unless the customerrequests it to be, and the insurance undertaking agrees to it being, in another language.

Note 4: The information at (4) to (15) need not be provided for distance contracts where information is provided under the Distance Marketing Directive or equivalent legal requirement.

For non-investment insurance contracts with retail customers concluded by a means of distance communication, other than by telephone (Distance Marketing Directive):

(16)

the insurance undertaking

(a)

the name, main business of the insurance undertaking, and the geographical address of the insurance undertaking's head office and branch, where appropriate;

(b)

the trade register in which the insurance undertaking's is entered and its registration number or an equivalent means of identification in that register;

(c)

where the insurance undertaking activity is subject to an authorisation scheme, the particulars of the relevant supervisory authority;

(17)

the financial service

(a)

a description of the main characteristics of the non-investment insurance contract;

(b)

the total price to be paid by the retail customer to the insurance intermediary for the non-investment insurance contract, including all related fees, charges and expenses and all taxes paid via the insurance intermediary or, when an exact price cannot be indicated, the basis for the calculation of the price enabling the retail customer to verify it;

(c)

notice of the possibility that other taxes and/or costs may exist that are not paid via the insurance intermediary or imposed by him;

(d)

any limitations of the period for which the information provided is valid;

(e)

the arrangements for payment and for performance of the non-investment insurance contract;

(f)

any specific additional cost for theretail customer of using the means of distance communication;

(18)

the distance contract

(a)

information about cancellation in accordance with ICOB 5.3.12 R;

(b)

information on any rights the insurance undertaking or the retail customer may have to terminate the non-investment insurance contract early or unilaterally, including any penalties imposed by the non-investment insurance contract in such cases;

(c)

the EEA State or States whose laws are taken by the insurance undertaking as a basis for the establishment of relations with the retail customer prior to the conclusion of the distance contract;

(d)

any contractual clause on law applicable to the policy or on competent court or both;

(e)

in which language, or languages, the contractual terms and conditions, and the prior information referred to in these rules are supplied, and furthermore in which language, or languages, the insurance undertaking, with the agreement of the retail customer, undertakes to communicate during the duration of the policy;

(19)

redress

(a)

whether or not there is an out-of-court complaint redress mechanism for the retail customer and, if so, the methods for having access to it; and

(b)

the existence of guarantee funds or other compensation arrangements.

For non-investment insurance contracts concluded by telephone with a retail customer who has agreed to limited information being provided before conclusion of the contract (Distance Marketing Directive):

(20)

before conclusion of the contract: the information specified in ICOB 5.3.6 R (2)(a) other than ICOB 5.3.6 R (2)(a)(viii); and

(21)

immediately after conclusion of the contract: the information referred to in sub-paragraphs (16) to (19) of this table.

Provisions applying during non-investment insurance contracts that are pure protection contracts:

(22)

any change to the information in sub-paragraphs (4) to (11) of this table.

ICOB 5.5.21R

2[deleted]

ICOB 5.5.22R

Where a non-investment insurance contract is underwritten by more than one insurance undertaking, any rules in this chapter requiring information to be provided to a customer about the insurance undertaking before conclusion of the contract apply only to the first-named insurance undertaking. Details of all the insurance undertakings providing cover must be provided promptly after conclusion of the contract.

ICOB 5.5.23G

The relevant supervisory authority in ICOB 5.5.20 R(16)(c) will in most cases be the FSA. Where an incoming EEA firm is providing cross border services, the relevant supervisory authority will be its Home State Regulator.

ICOB 5.5.24G

A description of the main characteristics of a non-investment insurance contract in ICOB 5.5.20 R(17)(a) would include the information referred to at ICOB 5.5.5 R(3) to (5) and (7). For a non-investment insurance contract that is a pure protection contract a description would also include a definition of each benefit and each option; information on the premiums for each benefit and the means and duration of payment of them.

ICOB 5.5.25G

The relevant out-of-court complaint redress mechanism at ICOB 5.5.5 R(11) and ICOB 5.5.20 R(3), (14) and (19)(a) will in most cases be the Financial Ombudsman Service.

ICOB 5.5.26G

The relevant guarantee funds or other compensation arrangements referred to at ICOB 5.5.5 R(12) and ICOB 5.5.20 R(19)(b) will in most cases be the compensation scheme.

Policy document

ICOB 5.5.27R

A policy document must contain all the contractual terms and conditions.

ICOB 5.5.28G

The policy document provided to a customer should contain all the contractual terms and conditions of the contract of insurance with that customer. The policy document can consist of more than one document, but all the documents making up the policy document must be provided to the customer at the same time.