1A firm must not enter into an agreement with a customer under which a charge is, or may become, payable for an optional additional product unless the customer has actively elected to obtain that specific product.
A firm must not impose a charge on a customer for an optional additional product under an agreement entered into on or after 1 April 2016 unless the customer has actively elected to obtain that specific product before becoming bound to pay the charge.
An optional additional product is a good, service or right of any description, whether or not financial in nature, that a customer may obtain (or not, as the case may be) at his or her election in connection with or alongside a non-investment insurance contract.
If the customer is required to obtain an additional product as a condition for the purchase of the non-investment insurance contract then that product is an optional additional product if the customer is given a choice:
as to the seller or supplier from whom to obtain the product; or
which specific product to obtain.
If, under the terms and conditions of an optional additional product, there is to be an automatic renewal of the agreement on substantially the same terms, it suffices for the purposes of (1) to (3) if the customer actively elected before entering into the initial agreement or a preceding renewal to obtain the product.
An automatic renewal of the agreement is not to be regarded as being on substantially the same terms if, following the renewal, a charge will or may become payable for the optional additional product for the first time (in which case, (1) to (3) apply at the time of the renewal).
Except as set out in (b), changes in the level of charges for an optional additional product are to be disregarded in determining whether an automatic renewal of an agreement is on substantially the same terms.
Firms are reminded that a similar prohibition on opt-out selling of add-on products is imposed by The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 in relation to optional additional agreements where the main sale is not a financial service or product.