ICOBS 5.1 General

Eligibility to claim benefits: general insurance contracts and pure protection contracts

ICOBS 5.1.1G
  1. (1)

    1In line with Principle 6, a firm should take reasonable steps to ensure that a customer only buys a policy under which he is eligible to claim benefits.

  2. (2)

    If, at any time while arranging a policy, a firm finds that parts of the cover apply, but others do not, it should inform the customer so he can take an informed decision on whether to buy the policy.

  3. (3)

    This guidance does not apply to policies arranged as part of a packaged bank account.2

Eligibility to claim benefits: payment protection contracts

ICOBS 5.1.2R
2
  1. (1)

    A firm arranging a payment protection contract must:

    2
    1. (a)

      2take reasonable steps to ensure that the customer only buys a policy under which he is eligible to claim benefits; and

    2. (b)

      2if, at any time while arranging the policy, it finds that parts of the cover do not apply, inform the customer so he can take an informed decision on whether to buy the policy.

  2. (2)

    This rule does not apply to payment protection contract arranged as part of a packaged bank account.

    2
ICOBS 5.1.3G
2
  1. (1)

    For a typical payment protection contract the reasonable steps required in the first part of the eligibility rule are likely to include checking that the customer meets any qualifying requirements for different parts of the policy.2

  2. (2)

    2This guidance does not apply to payment protection contracts arranged as part of a packaged bank account.

Eligibility to claim benefits: policies arranged as part of a packaged bank account

ICOBS 5.1.3AR

2A firm arranging policies as part of a packaged bank account must:

  1. (1)

    take reasonable steps to establish whether the customer is eligible to claim each of the benefits under each policy included in the packaged bank account which must include checking that the customer meets any qualifying requirements to claim each of the benefits under each policy; and

  2. (2)

    inform the customer whether or not he would be eligible to claim each of the benefits under each policy included in the packaged bank account so that the customer can take an informed decision about the arrangements proposed.

ICOBS 5.1.3BR

2A firm must make a record of the eligibility assessment and, if the customer proceeds with the arrangements proposed, retain it for a minimum period of three years from the date on which the assessment was undertaken.

ICOBS 5.1.3CR
  1. (1)

    32Throughout the term of a policy included in a packaged bank account, a firm must provide the customer with an eligibility statement, in writing,3 on an annual basis. This statement must set out any qualifying requirements to claim each of the benefits under the policy and recommend that the customer reviews his circumstances and whether he meets these requirements.

  2. (2)

    3Where a customer has reached an age limit on claiming benefits under a travel insurance policy included in a packaged bank account (or will reach an age limit before the next annual statement is due), a firm must state this clearly and prominently in the statement and on an annual basis thereafter.

  3. (3)

    3The statement (provided under ICOBS 5.1.3C R (1)) must not:

    1. (a)

      include any information other than that required under this rule; or

    2. (b)

      form part of another document provided to the customer by the firm; or

    3. (c)

      be included in the same mailing as any other document provided to the customer by the firm.

4Disclosure

ICOBS 5.1.4G

A firm should bear in mind the restriction on rejecting claims (ICOBS 8.1.1R (3)). Ways of ensuring a customer knows what he must disclose include:

4
  1. (1)

    explaining to a commercial customer4 the duty to disclose all circumstances material to a policy, what needs to be disclosed, and the consequences of any failure to make such a disclosure;

    4
  2. (2)

    ensuring that the commercial customer4 is asked clear questions about any matter material to the insurance undertaking;4

    44
  3. (3)

    explaining to the customer the responsibility of consumers to take reasonable care not to make a misrepresentation and the possible consequences if a consumer is careless in answering the insurer's questions, or if a consumer recklessly or deliberately makes a misrepresentation; and4

  4. (4)

    asking the customer clear and specific questions about the information relevant to the policy being arranged or varied.4