Related provisions for DISP App 1.6.13

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PERG 5.6.12GRP
Article 28 of the Regulated Activities Order (Arranging transactions to which the arranger is a party) excludes from the regulated activities in article 25(1) and 25(2) arrangements made for or with a view to contracts of insurance when:(1) the person (P) making the arrangements is the only policyholder; or(2) P, as a result of the transaction, would become the only policyholder.
PERG 5.6.15GRP
In some cases, a person may make arrangements to enter into a contract of insurance as policyholder on its own behalf and also arrange that another person become a policyholder under the same contract of insurance. If so, the person should be aware that the effect of the narrower exclusion in article 28 as part of implementation of the IMD is that he may be arranging on behalf of the other policyholder. This may be relevant, for example, to a company which arranges insurance
PERG 5.6.16GRP
The restriction in the scope of article 28 raises an issue where there is a trust with co-trustees, where each trustee will be a policyholder with equal rights and obligations. If the activities of one of the trustees include arranging in respect of contracts of insurance, that trustee could be viewed as arranging on behalf of his co-trustees who will also be policyholders. Similar issues also arise in respect of trustees assisting in the administration and performance of a contract
For the purpose of 3INSPRU 1.2.28R (1)(c)3, benefits payable include:(1) all guaranteed benefits including guaranteed surrender values and paid-up values;(2) vested, declared and allotted bonuses to which the policyholder is entitled;(3) all options available to the policyholder under the terms of the contract; and(4) discretionary benefits payable in accordance with the firm's regulatory duty to treat its customers fairly.
When a firm establishes its mathematical reserves in respect of a long-term insurance contract, the firm must include an amount to cover any increase in liabilities which might be the direct result of its policyholder exercising an option under, or by virtue of, that contract of insurance. Where the surrender value of a contract is guaranteed, the amount of the mathematical reserves for that contract at any time must be at least as great as the value guaranteed at that time.
(1) Where a policyholder may opt to be paid a cash amount, or a series of cash payments, the mathematical reserves for the contract of insurance7 must be sufficient to ensure that the payment or payments could be made solely from:(a) the assets covering those mathematical reserves; and(b) the resources arising from those assets and from the contract itself.(2) In (1) references to a cash amount or a series of cash payments include the amount or amounts likely to be paid on a voluntary
INSPRU 1.2.71R (1) applies only to accumulating with-profits policies; INSPRU 1.2.71R (2) applies to any other type of policy, including non-profit insurance contracts. In INSPRU 1.2.71R (1)(a) a firm must take into consideration, for example, a market value adjustment where such an adjustment has been described in representations made to policyholders by the firm. However, any discretionary adjustment, such as a market value adjustment, must not be included in the amount calculated
For the purposes of article 53(1)2, advice must be given to a person in his capacity as an investor or potential investor (which, in the context of contracts of insurance, will mean as policyholder or potential policyholder). So, article 53(1)2 will not apply where advice is given to persons who receive it as:(1) an adviser who will use it only to inform advice given by him to others; or(2) a journalist or broadcaster who will use it only for journalistic purposes.
Advice will still be covered by article 53(1)2 even though it may not be given to any particular policyholder (for example, advice given in a periodical publication or on a website).
PERG 5.3.10GRP
A person will have rights under a contract of insurance when he is a policyholder. The question of whether a person has rights under a contract of insurance may require careful consideration in the case of group policies (with reference to the Glossary definition of policyholder). In the case, in particular, of general insurance contracts and pure protection contracts, the existence or otherwise of rights under such policies may be relevant to whether a person is carrying on
SUP 18.2.37GRP
The independent expert is not expected to comment on the likely effects on new policyholders, that is, those whose contracts are entered into after the effective date of the transfer.
The regulated activity of assisting in the administration and performance of a contract of insurance (article 39A) relates, in broad terms, to activities carried on by intermediaries after the conclusion of a contract of insurance and for or on behalf of policyholders, in particular in the event of a claim. Loss assessors acting on behalf of policyholders in the event of a claim are, therefore, likely in many cases to be carrying on this regulated activity. By contrast, claims
1An insurer must:(1) handle claims promptly and fairly;(2) provide reasonable guidance to help a policyholder make a claim and appropriate information on its progress; (3) not unreasonably reject a claim (including by terminating or avoiding a policy); and(4) settle claims promptly once settlement terms are agreed.
PERG 5.11.3GRP
The exclusions outlined in (1) to (7) were available to intermediaries (and in some cases insurance undertakings) acting in connection with life policies before 14 January 2005. In essence, however, the following exclusions do not apply if they concern transactions relating to contracts of insurance:(1) dealing in investments as agent with or through authorised persons (article 22 of the Regulated Activities Order (Deals with or through authorised persons));(2) arranging transactions
3The exclusions in the Regulated Activities Order that relate to the various arranging activities are as follows.(-1) 8Under Article 24A(2), an activity that would otherwise be both arranging and bidding in emissions auctions is specifically excluded from arranging because the activity of bidding in emissions auctions does not form part of any other regulated activity (see PERG 2.7.6D G).(1) Under article 26, arrangements that do not or would not bring about the transaction to
The following exclusions from assisting in the administration and performance of a contract of insurance also apply to a person in specified circumstances:(1) while acting as trustee or personal representative (see PERG 2.9.3 G); or(2) in connection with the carrying on of a profession or of a business not otherwise consisting of regulated activities (see PERG 2.9.5 G); or(3) as an incoming ECA provider (see PERG 2.9.18 G); or(4) as a provider of non-motor goods or services related
The exclusions from the regulated activity of safeguarding and administering investments are as follows.(1) Safeguarding and administration activities carried on by one person are excluded if a specified third party undertakes a responsibility for the assets which is no less onerous than it would have been if he were doing the safeguarding and administration himself. The effect of this is that an authorised person with permission to carry on this regulated activity (or in certain
PERG 6.7.15GRP
A manufacturer or retailer may undertake an obligation to ensure that the customer becomes a party to a separate contract of insurance in respect of the goods sold. This would include, for example, a contract for the sale of a freezer, with a simple warranty in relation to the quality of the freezer, but also providing insurance (underwritten by an insurer and in respect of which the customer is the policyholder) covering loss of frozen food if the freezer fails. The FCA is unlikely
Under Principle 7, a firm that sells a group policy should provide appropriate information to the customer to pass on to other policyholders. It should tell the customer that he should give the information to each policyholder.
(1) Principle 8 requires a firm to manage conflicts of interest fairly. SYSC 10 also requires an insurance intermediary to take all reasonable steps to identify conflicts of interest, and maintain and operate effective organisational and administrative arrangements to prevent conflicts of interest from constituting or giving rise to a material risk of damage to its clients. 1(2) [deleted]11(3) If a firm acts for a customer in arranging a policy, it is likely to be the customer's
SUP App 2.8.1RRP
If a firm (whether within or outside the scope of the Solvency II Directive)2 decides to cease to effect new contracts of insurance, it must, within 28 days of that decision, submit a run-off plan to the FCA3 including: (1) a scheme of operations; and (2) an explanation of how, or to what extent, all liabilities to policyholders (including, where relevant, liabilities which arise from the regulatory duty to treat customers fairly in setting discretionary benefits) will be met
PERG 5.15.4GRP
Types of activity – are they regulated activities and, if so, why?Type of activityIs it a regulated activity?RationaleMARKETING AND EFFECTING INTRODUCTIONSPassive display of information -for example, medical insurance brochures in doctor’s surgery (whether or not remuneration is received for this activity)No.Merely displaying information does not constitute making arrangements under article 25(2) (see PERG 5.6.4 G).Recommending a broker/insurance undertaking and providing customer