Prior to the conclusion of a contract, a firm must specify, in particular on the basis of information provided by the customer, the demands and the needs of that customer as well as the underlying reasons for any advice given to the customer on that policy.
The details must be modulated according to the complexity of the policy proposed.
[Note: article 12(3) of the Insurance Mediation Directive]
A statement of demands and needs must be communicated:
The information may be provided orally where the customer requests it, or where immediate cover is necessary.
[Note: article 13 of the Insurance Mediation Directive]
The format of a statement of demands and needs is flexible. Examples of approaches that may be appropriate where a personal recommendation has not been given include:
providing a demands and needs statement as part of an application form, so that the demands and needs statement is made dependent upon the customer providing personal information on the application form. For instance, the application form might include a statement along the lines of: "If you answer 'yes' to questions a, b and c your demands and needs are those of a pet owner who wishes and needs to ensure that the veterinary needs of your pet are met now and in the future";
producing a demands and needs statement in product documentation that will be appropriate for anyone wishing to buy the product. For example, "This product meets the demands and needs of those who wish to ensure that the veterinary needs of their pet are met now and in the future";
giving a customer a record of all his demands and needs that have been discussed; and
providing a key features document.