Home FCA Handbook COMP COMP 5 COMP 5.7 Protected non-investment insurance distribution
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COMP 5.7 Protected non-investment insurance distribution

01/10/2018R

Protected non-investment insurance distribution is an insurance distribution activity where the investment concerned is a relevant general insurance contract or a pure protection contract but which is not a long-term care insurance contract or a reinsurance contract, provided that the conditions in COMP 5.7.2 R are satisfied.

01/01/2021R

COMP 5.7.1 R only applies if the conditions in (1) and (2) are satisfied:

  1. (1)

    the protected non-investment insurance distribution was carried on from an establishment of the relevant person in the United Kingdom; and

  2. (2)

    the claimant making the claim (or where COMP 3.2.4 R applies, the customer on behalf of whom a firm makes a claim) dealt initially, with a view to entering into a relevant general insurance contract or a pure protection contract but not a long-term care insurance contract or a reinsurance contract, with an intermediary that was established in the United Kingdom.

01/01/2021G

The FSCS will not cover a claim against an intermediary or a successor of an intermediary that meets the criteria of COMP 5.7.2R(2) where the claimant was introduced to that intermediary by an intermediary that does not meet the criteria of COMP 5.7.2R(2).

01/01/2021G

The FSCS will not cover a claim in respect of an intermediary that is not a relevant person, for example a retailer selling extended warranties that are connected contracts. However, COMP 5.7.2 R has the effect that a claim in respect of a relevant person further up the chain carrying on protected non-investment insurance distribution in accordance with COMP 5.7.2R(1) may be covered by the FSCS if the claimant dealt initially with a UK intermediary that is not a relevant person.

Advising without a personal recommendation

03/01/2018R

The FSCS must treat a claim relating to advice on a relevant general insurance contract or a pure protection contract (which is not a long-term insurance contract or a reinsurance contract) that falls outside article 53(1) of the Regulated Activities Order by virtue of article 53(1A) of that Order as being ‘in connection with protected non-investment insurance business’ for the purposes of COMP 5.2.1R(5) where the relevant person giving the advice, at the time the act or omission giving rise to the claim took place:

  1. (1)

    had, or required, permission to carry on; or

  2. (2)

    (in the case of an appointed representative) was exempt from the general prohibition in respect of,

an activity that was non-investment insurance business.