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PROD 1.4 Application of PROD 4

PROD 1.4.1 R

1 PROD 4 applies to:

  1. (1)

    an insurance intermediary; and

  2. (2)

    an insurer,

with respect to:

  1. (3)

    manufacturing insurance products; and

  2. (4)

    distributing insurance products.

[Note: articles 1(2) and 25 of the IDD]

PROD 1.4.2 G

1In PROD an insurance product may be read as being a reference to the product for distribution to customers generally and is not intended to refer to each individual contract of insurance being sold or underwritten (unless the context indicates otherwise).

PROD 1.4.3 R

1 PROD 4 does not apply in relation to the manufacturing or distributing of:

  1. (1)

    a contract of large risks, or

  2. (2)

    a reinsurance contract.

[Note: article 25(4) of the IDD]

When an intermediary may be considered to be manufacturing

PROD 1.4.4 EU
  1. 13(1) For the purposes of Article 25(1) of Directive (EU) 2016/97, insurance intermediaries shall be considered manufacturers where an overall analysis of their activity shows that they have a decision-making role in designing and developing an insurance product for the market.

    3(2) A decision-making role shall be assumed, in particular, where insurance intermediaries autonomously determine the essential features and main elements of an insurance product, including its coverage, price, costs, risk, target market and compensation and guarantee rights, which are not substantially modified by the insurance undertaking providing coverage for the insurance product.

    3(3) Personalisation of and adaptation of existing insurance products in the context of insurance distribution activities for individual customers, as well as the design of tailor-made contracts at the request of a single customer, shall not be considered manufacturing.

[Note: article 3 of the IDD POG Regulation]

PROD 1.4.5 G

1The effect of PROD 1.4.3EU and PROD 1.4.6R is that an insurance intermediary needs to consider if it is manufacturing an insurance product and, if so, should comply with PROD 4.2 (Manufacture of insurance products).

Effect of provisions marked “EU”

PROD 1.4.6 R
  1. (1)

    1Subject to (2) and PROD 1.4.3R, provisions in this section and in PROD 4 marked “EU” apply to firms manufacturing or distributing insurance products, but to whom the IDD POG Regulation does not apply, as if they were rules.

  2. (2)

    For the purposes of (1), a word or phrase used in the IDD POG Regulation and referred to in column (A) has the meaning indicated in Column (B) of the table below:



    “Article 17(1) of Directive (EU) 2016/97”

    ICOBS 2.5.-1R, in relation to a non-investment insurance contract, or COBS 2.1.1R, in relation to a life policy

    “Article 25(1) of Directive (EU) 2016/97”

    PROD 4.2.1R and PROD 4.2.2R

    “Article 8(2)”

    PROD 4.2.30EU

    “competent authorities”


    “customer” and “potential customer”


    “Directive (EU) 2016/97”


    “insurance-based investment products”

    insurance-based investment products

    “insurance distribution activities” and “distribution activities”

    insurance distribution activities

    “insurance distributor”


    “insurance intermediary”

    insurance intermediary

    “insurance undertaking”


    “manufacturer” and “manufacturers within the meaning of Article 2 of this Delegated Regulation”






  3. (3)

    In this sourcebook, where a reproduced provision of an article of the IDD POG Regulation refers to another part of the IDD POG Regulation, that other provision must also be read with reference to the table in (2).


PROD 1.4.7 R

1 PROD 4 applies to a firm with respect to activities carried on from an establishment maintained by it, or its appointed representative, in the United Kingdom.

[Note: article 7(2) of the IDD]

EEA territorial scope rule: compatibility with European law

PROD 1.4.8 R
  1. (1)

    1The territorial scope of PROD 4 is modified to the extent necessary to be compatible with European law.

  2. (2)

    This rule overrides every other rule in this sourcebook.

Electronic Commerce Directive: effect on territorial scope

PROD 1.4.9 G

1The rules and guidance on the E-Commerce Directive in ICOBS 1 Annex 1, Part 3, paragraph 1.2R and Part 4 paragraph 8, and in COBS 1 Annex 1, Part 2, paragraph 1.2R and Part 3, paragraph 7, apply equally in relation to the rules in PROD 4.

Interaction of PROD 4 and the RPPD Guide

PROD 1.4.10 G

1A firm to which PROD 4 applies need not apply the guidance in RPPD for matters covered by PROD if the firm has complied with PROD 4 (see also PROD 4.4.2G). PROD 4.4 includes guidance based on the RPPD which firms subject to PROD 4 should apply.