Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.

ICOBS 6A.1 1Guaranteed asset protection (GAP) contracts



1This section applies to a firm which sells a GAP contract to a customer in connection with the sale of a vehicle by:

  1. (1)

    the firm; or

  2. (2)

    a person connected to the firm.


1There is a sufficient connection between the GAP contract and the sale of a vehicle if the GAP contract is sold in connection with other goods and services, for example a credit agreement.


1A person connected with a firm includes acting as an introducer or appointed representative for that firm or if, regardless of authorisation status, it has a relevant business relationship with the firm.

Ensuring the customer can make an informed decision

  1. (1)

    1Before a GAP contract is concluded, a firm must give the customer the following information:

    1. (a)

      the total premium of the GAP contract, separate from any other prices;

    2. (b)

      the significant features and benefits, significant and unusual exclusions or limitations, and cross-references to the relevant policy document provisions;

    3. (c)

      whether or not the GAP contract is sold in connection with vehicle finance, that GAP contracts are sold by other distributors;

    4. (d)

      the duration of the policy;

    5. (e)

      whether the GAP contract is optional or compulsory;

    6. (f)

      when the GAP contract can be concluded by the firm, as described in ICOBS 6A.1.6R and ICOBS 6A.1.7R; and

    7. (g)

      the date the information in (a) to (f) is provided to the customer.

  2. (2)

    This information must be communicated in a clear and accurate manner and on paper2 or another durable medium in accordance with ICOBS 4.1A2.

  3. (3)

    This information must be drawn to the customer’s attention and must be clearly identifiable as key information that the customer should read.


1A firm must also comply with the rules in ICOBS 6 (Product Information).

Deferred opt-in for GAP contracts


1Except as specified in ICOBS 6A.1.7R, a GAP contract cannot be concluded by a firm until at least 2 clear days have passed since the firm complied with ICOBS 6A.1.4R.


1A firm can conclude a GAP contract the day after providing the information in ICOBS 6A.1.4R to a customer if the customer:

  1. (1)

    initiates the conclusion of the GAP contract; and

  2. (2)

    consents to the firm concluding the GAP contract earlier than provided for in ICOBS 6A.1.6R, and confirms that they understand the restriction in ICOBS 6A.1.6R.


1Before concluding a GAP contract, a firm should have regard to the information needs of its customers and consider whether it would be in the customer’s interest to receive the information in ICOBS 6A.1.4R again, for example, if a long time has passed between providing the information and the conclusion of the contract.

ICOBS 6A.2 Optional additional products

Restriction on marketing or providing an optional product for which a fee is payable

  1. (1)

    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.

  2. (2)

    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.

  3. (3)

    A firm must not invite or induce a customer to obtain an optional additional product for which a charge will be, or may become, payable if the firm knows or has reasonable cause to suspect that:

    1. (a)

      a contravention of (1) or (2) will take place with respect to the product; or

    2. (b)

      the person supplying the optional additional product will act in a way that would contravene (1) or (2) if that person were a firm.

  4. (4)

    An omission by a customer is not to be regarded as an active election for the purpose of this rule.

  5. (5)

    It is immaterial for the purposes of (3) whether or not the firm would or might be a party to the agreement for the optional additional product.

  6. (6)

    A charge includes a financial consideration of any kind whether payable to the firm or any other person.

  7. (7)

    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.

  8. (8)

    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:

    1. (a)

      as to the seller or supplier from whom to obtain the product; or

    2. (b)

      which specific product to obtain.

  9. (9)

    It is immaterial for the purposes of (7) and (8) whether the optional additional product is obtained from the firm or another person.

  10. (10)
    1. (a)

      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.

    2. (b)

      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).

    3. (c)

      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.

  11. (11)

    A customer may make an active election for the purposes of this rule through an intermediary in the sales process or through a person acting on behalf of the firm.


An example of an omission by a customer which is not to be regarded as an active election is the failure by the customer to change a default option such as a pre-ticked box on a website.


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.


Firms are reminded that they must ensure that their appointed representatives comply with this section ICOBS 6A.2.

ICOBS 6A.3 Cross-selling

Requirements where insurance is the primary product

ICOBS 6A.3.1 R

1When offering a non-insurance ancillary product or service as part of a package or the same agreement with an insurance product, a firm must:

  1. (1)

    inform the customer whether it is possible to buy the different components separately and, if so must provide the customer with an adequate description of:

    1. (a)

      the different components;

    2. (b)

      where applicable, any way in which the risk or insurance coverage resulting from the agreement or package differs from that associated with the components taken separately; and

  2. (2)

    provide the customer with separate evidence of the costs and charges of each component.

[Note: articles 24(1) and (2) of the IDD]

Requirements where insurance is the ancillary product

ICOBS 6A.3.2 R

1When offering an insurance product ancillary to and as part of a package or in the same agreement with a non-insurance product or service, a firm must offer the customer the option of buying the non-insurance goods or services separately.

ICOBS 6A.3.3 R

1 ICOBS 6A.3.2R does not apply where the non-insurance product or service is any of the following:

  1. (1)

    investment services or activities;

  2. (2)

    a credit agreement as defined in point 3 of article 4 of the MCD which is:

    1. (i)

      an MCD credit agreement; or

    2. (ii)

      an exempt MCD credit agreement; or

    3. (iii)

      a CBTL credit agreement; or

    4. (iv)

      a credit agreement referred to in articles 72G(3B) and (4) of the Regulated Activities Order;

  3. (3)

    a payment account as defined in regulation 2(1) of the Payment Accounts Regulations.

[Note: article 24(3) of the IDD]


ICOBS 6A.3.4 R

1This section does not prevent the distribution of insurance products which provide coverage for various types of risks (multi-risk insurance policies).

[Note: article 24(5) of the IDD]

ICOBS 6A.3.5 G

1In addition to the rules in ICOBS 6A.3 firms should still comply with the other rules in ICOBS relating to the offer and sale of insurance products that form part of the package or agreement, such as those applying to price disclosure (ICOBS 6.1.13R), optional additional products (ICOBS 6A.2) and specifying the demands and needs of the customer (ICOBS 5.2.1R).

[Note: article 24(6) of the IDD]

ICOBS 6A.4 Travel insurance and medical conditions


ICOBS 6A.4.1 R

1This section applies in relation to a travel insurance policy, which is not:

  1. (1)

    a group policy; or

  2. (2)

    a policy entered into by a commercial customer.


ICOBS 6A.4.2 G

1The purpose of this section is to improve access for consumers to travel insurance policies that include cover for more serious medical conditions.

Medical cover firm directory

ICOBS 6A.4.3 R
  1. (1)

    1A firm must include the details of a medical cover firm directory on the page of its website where it markets travel insurance policies.

  2. (2)

    The information required by (1) must:

    1. (a)

      be provided in a prominent, clear and accurate manner; and

    2. (b)

      include the contact details of the medical cover firm directory, including its telephone number and a link to its website;

  3. (3)

    The obligations in (1) and (2) apply 30 calendar days from the date on which the firm becomes aware (or ought reasonably to have become aware) of a publicly available directory that meets the requirements of a medical cover firm directory.

ICOBS 6A.4.4 G

1The FCA’s website contains a list of those directories which it considers to be medical cover firm directories.

Additional pre-contract information for the consumer

ICOBS 6A.4.5 R
  1. (1)

    12Where one or more circumstances set out in ICOBS 6A.4.6R applies, the firm that is responsible for communicating with the consumer under this sourcebook, must also communicate to the consumer:

    1. (a)

      the contact details, including telephone number and website, of the medical cover firm directory;

    2. (b)

      the purpose of the medical cover firm directory; and

    3. (c)

      the potential benefits of accessing the medical cover firm directory and any other relevant considerations.

  2. (2)

    The firm must communicate the information in (1):

    1. (a)

      in a manner that is prominent, clear and accurate; and

    2. (b)

      in accordance with ICOBS 4.1A.

The circumstances

ICOBS 6A.4.6 R

1 2The circumstances for the purposes of ICOBS 6A.4.5R are where a firm:

  1. (1)

    declines, or otherwise does not offer, a consumer a quotation due (wholly or partly) to a medical condition;

  2. (2)

    cancels a consumer’spolicy due (wholly or partly) to a medical condition;

  3. (3)

    offers a policy with a medical condition exclusion which cannot be removed from the policy;

  4. (4)

    offers a policy with a medical condition premium of £100 or more; and/or

  5. (5)

    offers a policy in respect of which the medical condition premium is not known.

Content of communication

ICOBS 6A.4.7 G
  1. (1)

    12When describing the purpose and potential benefits of accessing the medical cover firm directory, the communication provided to consumers pursuant to ICOBS 6A.4.5R should:

    1. (a)

      tell the consumer why they are receiving the communication;

    2. (b)

      taken as a whole, not discourage the consumer from using the directory; and

    3. (c)

      otherwise be the result of careful consideration by the firm of consumer needs and expectations in light of the requirements of relevant principles and rules, including Principles 6, 7 and 8.

  2. (2)

    An example of a relevant consideration (referred to in ICOBS 6A.4.5R(1)(c)) is where multiple consumers have applied for a joint travel insurance policy from the firm and should consider the consequences of purchasing separate travel insurance policies.

Exception: multiple policies

ICOBS 6A.4.8 R

1 2A firm need not comply with ICOBS 6A.4.5R where it is contemporaneously able to communicate an offer to a consumer of a travel insurance policy in respect of which none of the circumstances set out in ICOBS 6A.4.6R apply.

Exception: consumer has already accessed the medical cover firm directory

ICOBS 6A.4.9 R

1 2A firm need not comply with ICOBS 6A.4.5R where all the following conditions are met:

  1. (1)

    the firm is listed on a medical cover firm directory;

  2. (2)

    the firm is aware that the consumer has already accessed the medical cover firm directory in respect of the same risk; and

  3. (3)

    only ICOBS 6A.4.6R (4) applies.

ICOBS 6A.4.10 R

1 2A firm must not rely on the exception in ICOBS 6A.4.8R or ICOBS 6A.4.9R where it would still be in the consumer’s best interests to provide the communication under ICOBS 6A.4.5R.

ICOBS 6A.4.11 G

1 2An example of where it may be in the consumer’s best interests to provide the communication is where the consumer has expressed dissatisfaction to the firm with the quote provided.

ICOBS 6A.4.12 G
  1. (1)

    12Whether a firm has responsibility for communicating with the consumer under this section will depend on the rules in this sourcebook applicable to the relevant circumstances, and the language of relevant provisions in this section should be construed accordingly. See, for example, ICOBS 5.1.3CR (Packaged bank accounts), ICOBS 6.-1R (Producing and providing product information), ICOBS 6.1 (Providing product information to customers) and ICOBS 6.5 (Renewals).

  2. (2)

    Guidance on the application of these requirements to an insurer that is an incoming firm can be found at ICOBS 1 Annex 1 (Part 2) 5.1R.

  3. (3)

    Firms with appointed representatives are reminded that the effect of s39(4) of the Act is that where the appointed representative carries out the relevant activity, the firm must ensure that the appointed representative complies with the relevant provision (see SUP 12.3.1G).

Assessment of medical condition risk

ICOBS 6A.4.13 G
  1. (1)

    12Firms should assess the risk associated with medical conditions and calculate medical condition premiums by reference to reliable information that is relevant to the assessment of the risk. Firms which do not do this may communicate unclear, unfair or misleading price information to consumers and so risk breaching Principles 2, 6 and/or 7, and ICOBS 2.2.2R and/or ICOBS 2.5-1R. Firms also need to consider their obligations under the Equality Act 2010.

  2. (2)

    Firms are also reminded of their obligations in PROD 4.2 or 4.3 to identify and distribute travel insurance policies to the target market.

  3. (3)

    Prior to a firm offering a policy with a very high medical condition premium, the firm should take all reasonable steps to consider whether:

    1. (a)

      the nature of the medical screening or assessment process is insufficient to provide reliable information which is relevant to the assessment of the risk associated with the particular medical condition;

    2. (b)

      the high premium is intended to indicate an unwillingness to accept the risk by the insurer; or

    3. (c)

      the high premium is due to the medical condition falling outside of the insurer’s risk appetite or the target market for the product.

  4. (4)

    Where this is the case, offering a quote may mislead the consumer and/or result in them not being treated honestly, fairly and professionally in their best interests. A firm should consider instead whether it would be more appropriate not to offer a quote for the risk, explain the reason/s why not to the consumer and provide them with the details of the medical cover firm directory under ICOBS 6A.4.5R.