ICOBS 6.1 Providing product information to customers: general

The appropriate information rule applies:

1. (1)

   at all of the different stages of a contract and includes pre-conclusion and post-conclusion, and also when mid-term changes and renewals are proposed;

2. (2)

   in the same way to any policy, regardless of whether that policy is sold on its own, in connection with another policy, or in connection with other goods or services; and

3. (3)

   to the price of the policy.

The level of information required will vary according to matters such as:

1. (1)

   the knowledge, experience and ability of a typical customer for the policy;

2. (2)

   the policy terms, including its main benefits, exclusions, limitations, conditions and its duration;

3. (3)

   the policy's overall complexity;

4. (4)

   whether the policy is bought in connection with other goods and services including another policy (also see ICOBS 6A.3 (cross selling));

5. (5)

   distance communication information requirements (for example, under the distance communication rules less information can be given during certain telephone sales than in a sale made purely by written correspondence (see ICOBS 3.1.14 R)); and

6. (6)

   whether the same information has been provided to the customer previously and, if so, when.

1. (1)

   This guidance is relevant to a firm when it provides a consumer with:

   1. (a)

      a quotation for a travel insurance policy; or

   2. (b)

      a statement (provided under ICOBS 5.1.3CR(1)) in respect of a travel insurance policy included in a packaged bank account.

2. (2)

   At the same time as it provides the information in (1), the firm should:

   1. (a)

      disclose to the consumer whether any medical condition exclusion can be removed from the policy (in whole or in part); and

   2. (b)

      if so, how, and the terms on which it can be removed.

3. (3)

   Firms are also reminded of their obligations in ICOBS 5.2.2BR to ensure the policy proposed is consistent with the consumer’s insurance demands and needs.

A firm dealing with a commercial customer:

1. (1)

   may choose to provide some of or all of the appropriate information in an IPID (see ICOBS 6.1.10AR), a policy summary or a similar summary if it considers this to be a comprehensible form in which to provide that information; and

2. (2)

   should include the IPID information (regardless of whether an IPID itself is provided).

Cancellation rights do not affect what information it is appropriate to give to a customer in order to enable him to make an informed purchasing decision.

The IPID information:

1. (1)

   needs to be provided on paper or on another durable medium;

2. (2)

   in the case of telephone selling, a firm may provide the IPID in accordance with the distance communication timing requirements and provide the IPID to the customer immediately after the conclusion of the policy,

in accordance with ICOBS 6.6 (Means of communication).

[Note: article 23(7) of the IDD]

1. (1)

   Appropriate information other than IPID information includes, among other matters, any other information required by the appropriate information rule (ICOBS 6.1.5R), specific price disclosure requirements (ICOBS 6.1.13R), Solvency II Directive disclosure requirements (ICOBS 6.2.2R), renewals (ICOBS 6.5) and guaranteed assets protection (GAP) products (ICOBS 6A.1.4R).

2. (2)

   A firm needs to consider the form in which it provides appropriate information (see ICOBS 6.1.5R).

3. (3)

   A firm can provide the other information in (1) together with the IPID as long as the IPID remains a stand-alone document.

[Note: article 20(4) and article 20(7) last paragraph of the IDD]

To comply with the customer’s best interest rule and Principle 7 (communication with clients) a firm should:

1. (1)

   include consideration of the information needs of the customers including:

   1. (a)

      what they need to understand the relevance of any information provided by the firm; and

   2. (b)

      at which point in the sales process will the information be most useful to the customer to enable them to make an informed decision;

2. (2)

   provide evidence of cover promptly after inception of a policy,

taking into account the type of customer and the effect of other information requirements, for example, those under the distance communication rules (ICOBS 3.1); and

1. (3)

   in relation to a group policy, provide appropriate information to the customer, telling the customer to pass it on to each policyholder.

Under Principle 7 a firm should provide evidence of cover promptly after inception of a policy. Firms will need to take into account the type of customer and the effect of other information requirements, for example those under the distance communication rules (ICOBS 3.1).

In addition to the requirements in ICOBS 6.1 (Product information) firms are reminded that:

1. (1)

   when offering a policy as part of a packaged bank account the firm may be subject to the requirements of regulation 13 (payment accounts packages with another product or service) of the Payment Accounts Regulations;

2. (2)

   ICOBS 6A.3 (Cross-selling) contains rules in relation to packages which include both insurance and non-insurance products or services.