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ICOBS 2.2 Communications to clients and financial promotions



In addition to the general application rule for this sourcebook, this section applies to the communication, or approval for communication, to a person in the United Kingdom of a financial promotion of a non-investment insurance contract unless it can lawfully be communicated by an unauthorised communicator without approval.

Clear, fair and not misleading rule


When a firm communicates information, including a financial promotion, to a customer it must ensure that2 is clear, fair and not misleading.

[Note: article 17(2) of the IDD]2

Marketing communications


2A firm must ensure that, in relation to insurance distribution, marketing communications are always clearly identifiable as such.

[Note: article 17(2) of the IDD]

Approving financial promotions

  1. (1)

    Before a firm approves a financial promotion it must take reasonable steps to ensure that the financial promotion is clear, fair and not misleading.

  2. (2)

    If, subsequently, a firm becomes aware that a financial promotion is not clear, fair and not misleading, it must withdraw its approval and notify any person that it knows to be relying on its approval as soon as reasonably practicable.

  1. (1)

    3The effect of section 55NA of the Act is that5 a firm is unable to approve a financial promotion unless:

    1. (a)

      the firm is a permitted approver in relation to the financial promotion; or

    2. (b)

      an approver permission exemption applies.

  2. (2)

    SUP 6A contains guidance on applying for approver permission.

Pricing claims: guidance on the clear, fair and not misleading rule

  1. (1)

    This guidance applies in relation to a financial promotion that makes pricing claims, including financial promotions that indicate or imply that a firm can reduce the premium, provide the cheapest premium or reduce a customer's costs.

  2. (2)

    Such a financial promotion should:

    1. (a)

      be consistent with the result reasonably expected to be achieved by the majority of customers who respond, unless the proportion of those customers who are likely to achieve the pricing claims is stated prominently;

    2. (b)

      state prominently the basis for any claimed benefits and any significant limitations; and

    3. (c)

      comply with other relevant legislative requirements, including the Consumer Protection from Unfair Trading Regulations 2008 and the Business Protection from Misleading Marketing Regulations 2008.1


Sustainability-related claims: guidance on the clear, fair and not misleading rule


4A firm is reminded of its obligations under ESG 4.3.1R when it communicates or approves a financial promotion that references the sustainability characteristics of a product or service.

The reasonable steps defence

ICOBS 2.2.5R

2If, in relation to a particular communication or financial promotion, a firm takes reasonable steps to ensure it is fair, clear and not misleading then:

  1. (1)

    the firm will not contravene ICOBS 2.2.2R where:

    1. (a)

      the recipient is a customer that does not make the arrangements preparatory to the conclusion of the contract of insurance; or

    2. (b)

      the communication is made in relation to activities other than insurance distribution; and

  2. (2)

    a contravention of the clear, fair and not misleading rule (ICOBS 2.2.2R) does not give rise to a right of action under section 138D of the Act.