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Status: You are viewing the version of the handbook as on 2018-12-10.

PERG 5.13 Appointed representatives

What is an appointed representative?

PERG 5.13.1GRP

Section 39 of the Act (Exemption of appointed representatives) exempts appointed representatives from the need to obtain authorisation (or, in relation to an appointed representative with a limited permission, provides that sections 20(1) and (1A) and 23(1A) of the Act do not apply in relation to the carrying on of the regulated activity which is comprised in the business for which his principal has accepted responsibility and for which he does not have limited permission)1. An appointed representative is a person who is party to a contract with an authorised person which permits or requires him to carry on certain regulated activities (see Glossary for full definition). SUP 12 (Appointed representatives) contains rules and guidance relating to appointed representatives.

PERG 5.13.2GRP

Unless a person has only a limited permission for certain credit-related regulated activities, a1 person who is an authorised person cannot be an appointed representative (see section 39(1) of the Act (Exemption of appointed representatives)).

1

Business for which an appointed representative is exempt

PERG 5.13.3GRP

An appointed representative can carry on only those regulated activities which are specified in the Appointed Representatives Regulations. The regulated activities set out in the table in PERG 5.13.4 G are included in those regulations. As set out in the table, the insurance distribution activities2 that can be carried on by an appointed representative differ depending on the type of contracts of insurance in relation to which the activities are carried on.

PERG 5.13.4GRP

Insurance insurance distribution activities2 activities able to be carried on by an appointed representative. This table belongs to PERG 5.13.3 G.

Type of contract of insurance

Regulated activities an appointed representative can carry on

General insurance contract

Pure protection contract

Life policy

Becoming an appointed representative

PERG 5.13.5GRP

A person2 may wish to become an appointed representative2 in relation to one or more of the insurance distribution activities2 specified in the Appointed Representatives Regulations (see table in PERG 5.13.4 G). If so, the person2 must be appointed under a written contract by an authorised person, who has permission to carry on those regulated activities and who accepts responsibility for the appointed representative's actions when acting for them2. SUP 12.4 (What must a firm do when it appoints an appointed representative or an EEA tied agent2?) and SUP 12.5 (Contracts: required terms) set out the detailed requirements that must be met for an appointment to be made. In particular, an appointed representative will not be able to commence an insurance distribution activity2 until that appointed representative is2 included on the Financial Services Register for such activities.

Persons who are already appointed representatives

PERG 5.13.6GRP

Where a person (A), who2 is already an appointed representative, proposes to start to2 carry on any insurance distribution activities, A2 will need to consider the following matters.

  1. (1)

    A2 must become authorised if the insurance distribution activities that A proposes to carry on2 include activities that do not fall within the table in PERG 5.13.4 G (for example, dealing as agent in pure protection contracts)2. The Act does not permit any person to be exempt for some activities and authorised for others (although a person with only a limited permission for certain credit-related regulated activities may also be an appointed representative for other regulated activities specified in the Appointed Representatives Regulations (see SUP 12.2.3 G))1. A2 will, therefore, need to apply for permission to cover all the regulated activities that A proposes 2 to carry on.

  2. (2)

    If A2 proposes to carry on regulated activities that are2 specified in the Appointed Representatives Regulations in relation to contracts of insurance (see the table in PERG 5.13.4 G), A2 may be able to do so as an appointed representative bearing in mind the following.

    1. (a)

      A2 will need to be appointed by an authorised person prepared to accept responsibility for A’s insurance distribution activities2 when acting for the authorised person2. The authorised person must have permission to carry on these regulated activities.

    2. (b)

      If these insurance distribution activities2 are to be carried on for the same authorised person who has already appointed A for2 other regulated activities, the contract between them will need to be amended to reflect the additional activities. Other amendments to the contract will be required (see SUP 12.5.6A R).

    3. (c)

      A2 cannot commence an insurance distribution activity until A2 is included on the Financial Services Register as carrying on such activities.

    4. (d)

      An appointed representative would be entitled to have more than one principal subject to certain restrictions. In relation to non-investment insurance contracts (general insurance contracts and pure protection contracts), an appointed representative may have an unlimited number of principals. In relation to regulated mortgage contracts and designated investment business, an appointed representative is limited in the number of principals he may have. In any case where an appointed representative has multiple principals, those principals are required to enter into a multiple- principal agreement (see SUP 12.4.5D G to SUP 12.4.5G G (Appointment of an appointed representative (other than an introducer appointed representative)).

    5. (e)

      If A’s activities2 are limited to introducing, A2 should consider the specific Handbook provisions relating to introducer appointed representatives (see SUP 12 (What must a firm do when it appoints an appointed representative or an EEA tied agent2?)).