ICOBS 2.1 Client categorisation

Different provisions in this sourcebook may apply depending on the type of person with whom a firm is dealing. The type of person a firm generally deals with for the purposes of ICOBS is a customer who will either be a consumer or a commercial customer, and sometimes a larger commercial customer. ICOBS in places also refers to firms dealing with policyholders. This guidance explains the combined effect of those defined terms and some of the application provisions in ICOBS 1. 

1. (1) [deleted]
2. (2) [deleted]
3. (2A) The meaning of customer will depend on the part of ICOBS it is used in and the type of insurer involved. A reference to the defined term ‘customer’ in:
   1. (a)(i) ICOBS 2 means a policyholder or prospective policyholder; and
   2.    (ii) ICOBS 2.5.-1R also includes a policy stakeholder; and
   3. (b) the rest of ICOBS (that is, other than ICOBS 2) means a policyholder or a prospective policyholder who makes the arrangements preparatory to them concluding a contract of insurance (directly or through an agent).
4. (2B) In ICOBS the meaning of policyholder depends on whether the insurer of the contract of insurance in question is a Solvency II firm or not. (See the Glossary definition of the term policyholder.)
5. (3) A consumer is any natural person who is acting for purposes which are outside their trade, business or profession.
6. (4) A commercial customer is a customer who is not a consumer.
7. (5) A larger commercial customer is a commercial customer that meets certain size thresholds. For the purposes of the application provisions in ICOBS 1 Annex 1 Part 2 paragraph 2 (and this guidance), those size thresholds only need to be applied to the policyholder involved in making the arrangements preparatory to them concluding the contract of insurance. 

8. (6) Where ICOBS 2 refers to a ‘customer’ then firms will need to comply with those provisions in relation to all of the policyholders (and, where relevant, policy stakeholders) of the contract of insurance in question, irrespective of whether the policyholder making the arrangements preparatory to them concluding the contract is a consumer, commercial customer or a larger commercial customer. (Note that ICOBS 2.7.3G is expressly dis-applied in relation to larger commercial customers.)

    

1. (1)

   Except where paragraph (2) applies, if a customer is acting in the capacity of both a consumer and a commercial customer in relation to a particular contract of insurance, the customer is a commercial customer.

2. (2)

   For the purposes of ICOBS 5.1.4 G and ICOBS 8.1.2 R, if, in relation to a particular contract of insurance, the customer entered into it mainly for purposes unrelated to his trade or profession, the customer is a consumer.