ICOBS 8.4 Employers’ Liability Insurance

1. (1)

   A firm carrying out contracts of insurance, or a managing agent managing insurance business, including in either case business accepted under reinsurance to close, which includes United Kingdom commercial lines employers' liability insurance, must:

   1. (a)

      produce an employers’ liability register complying with the requirements in (2) and ICOBS 8 Annex 1;

   2. (b)

      [deleted]

   3. (c)

      [deleted]

2. (1A)

   [deleted]

3. (2)

   For the purposes of (1)(a) the employers’ liability register is required to:

   1. (a)

      include the date upon which the register was produced;

   2. (b)

      include a database which:

      1. (i)

         reliably stores information required by ICOBS 8 Annex 1;

      2. (ii)

         in relation to information required by ICOBS 8 Annex 1 1.1R(1), contains accurate information and, in relation to information required by ICOBS 8 Annex 1 1.1R(2), contains information which faithfully reproduces the information that the firm has; and

      3. (iii)

         has an effective search function which allows a person inputting data included on the register relating to a particular employer over a particular period to retrieve information on the register relating to a potential employers’ liability claim corresponding to that employer and period;

   3. (c)

      allow for requests for information or searches relating to a potential claim to be made by:

      1. (i)

         individuals with the potential claim, or their authorised representative, or

      2. (ii)

         any employer to whom the potential claim relates; or

      3. (iii)

         an insurer which is potentially jointly and severally liable with another firm in relation to the potential claim; or

      4. (iv)

         a relevant insurance intermediary acting for an insurer in (iii);

   4. (d)

      allow for requests by a tracing office which meets the conditions in ICOBS 8.4.9R relating to the use of information on the firm's register to the extent that the information is necessary, and used solely, to enable the tracing office to provide comprehensive searching facilities to its users; and

   5. (e)

      allow for responses to requests or searches in (c) to be provided without delay.

4. (3)

   [deleted]

5. (4)

   For the purposes of (1):

   1. (a)

      United Kingdom commercial lines employers' liability insurance means commercial lines employers' liability insurance where both the employer’s business was or is carried on, and the employees’ course of employment was or is, in the United Kingdom; and

   2. (b)

      commercial lines business comprises contracts of insurance carried out in relation to persons whose employers' liability insurance relates to a business or profession they carry on.

1. (1)

    A firm must make available:

   1. (a)

       the information on the employers’ liability register either:

      1. (i)

          on the firm's website; or

      2. (ii)

          by arranging for a tracing office which meets the conditions in ICOBS 8.4.9 R to make the information available on the tracing office’s website; and

   2. (b)

       the latest director's certificate prepared in accordance with ICOBS 8.4.7AR and the latest report prepared by an auditor for the purposes of ICOBS 8.4.7BR , to a tracing office which has obtained information from the firm for the purposes of providing comprehensive tracing information, in accordance with ICOBS 8.4.4R (2)(d), provided that the tracing office has agreed with the firm not to disclose confidential information in the certificate and the report to third parties, save as required by law.

2. (2)

    If a firm arranges for a tracing office to make information available for the purposes of (1)(a)(ii) the firm must:

   1. (a)

       send to the tracing office copies of its latest director's certificate and report prepared by the firm's auditor provided that the tracing office has agreed with the firm not to disclosure confidential information in the certificate and the report to third parties, save as required by law;

   2. (b)

       maintain records of all the tracing information and copies of all documents it has provided to the tracing office;

   3. (c)

       retain all legal rights in relation to the ownership and use of the information and documents provided to the tracing office to enable the firm to provide that information or documentation to another tracing office or to make it available itself; and

   4. (d)

       send to the tracing office its Firm Reference Number.

1. (1) A firm must obtain a written statement, by a director of the firm responsible for the production of the register, that, to the best of the director's knowledge, during the reporting period the firm in its production of the register is either:
   1. (a) materially compliant with the requirements of ICOBS 8.4.4R(2) and ICOBS 8 Annex 1, including (where necessary) how the firm has used and continues to use its best endeavours in accordance with ICOBS 8 Annex 1.1.1CR; or
   2. (b) not materially compliant with the provisions referred to in ICOBS 8.4.7AR(1)(a), in which case the statement must also set out, to the best of the director’s knowledge, the information required by ICOBS 8.4.7AR(3).
2. (2) For the purposes of this rule and ICOBS 8.4.7BR, ‘materially compliant’ means that in relation to at least 99% of policies for which information is required to be included, the information in the register does not contain any inaccuracy or lack faithful reproduction (as relevant) that would affect the outcome of a search when compared to a search carried out with fully accurate and/or faithfully reproduced information.
3. (3) The information referred to in (1)(b) is:
   1. (a) a description of the ways in which the firm, in its production of the register, is not materially compliant;
   2. (b) the number of policies, in relation to which, either:
      1. (i) the firm is not able to include any information in the register; and/or
      2. (ii) information is included in the register, but information may be incorrect or incomplete,
      3. in each case as a proportion of the total number of policies required to be included in the register.
   3. (c) where the firm is only practicably able to provide an estimate of the numbers in (b), the basis of each estimate; and
   4. (d) a description of the systems and controls used in the production of the register and of the steps, together with relevant timescales, that the firm is taking to ensure that it will be materially compliant as soon as practicable.
4. (4) The firm must ensure that the director's certificate includes the description of ‘materially compliant’ referred to in (2).
5. (5) The director's certificate must be obtained by 31 August each year, covering the period of production of the register from 1 April to 31 March.

1. (1) A firm must obtain a report satisfying the requirements of (2), prepared by an auditor satisfying the requirements of SUP 3.4 and SUP 3.8.5R to SUP 3.8.6R, and addressed to the directors of the firm.
2. (2) The report referred to in (1) must:
   1. (a) be prepared on the basis of providing an opinion under a limited assurance engagement confirming whether the auditor has found no reason to believe that the firm, solely in relation to the firm's extraction of information from its underlying records, has not materially complied with the requirements in ICOBS 8.4.4R(2) and ICOBS 8 Annex 1 in the production of its employer’s liability register during the reporting period, having regard in particular to the possible errors and omissions referred to in (c);
   2. (b) use the description of ‘material compliance’ as referred to in ICOBS 8.4.7AR(2), adapted as necessary to apply solely to the firm's extraction of information from its underlying records;
   3. (c) address, in particular, the following risks:
      1. (i) information relating to certain policies issued or renewed on or after 1 April 2011 is entirely omitted from the register even though some relevant policy details are included in the firm's underlying records;
      2. (ii) information relating to certain policies in respect of which claims were made on or after 1 April 2011 is entirely omitted from the register even though some relevant policy details are included in the firm's underlying records;
      3. (iii) relevant information required to be included in the register, and which is included in the firm's underlying records, is omitted from, or is inaccurately entered on to, the register; and
      4. (iv) information relating to policies which do not provide employers’ liability insurance are included in the register.
3. (3) The report referred to in (1) must be obtained by 31 August each year, covering the period of production of the register from 1 April to 31 March.

Where a firm is not materially compliant with the provisions referred to in ICOBS 8.4.7AR(1)(a) solely as a result of: 

1. (1) the unavailability of data on historical policies; or
2. (2) the unavailability of data following an insurance business transfer, 

the FCA considers that the firm is unlikely to be required to notify the FCA under SUP 15.3.11R(1).

The conditions referred to in ICOBS 8.4.4R (2)(d) and ICOBS 8.4.7R (1)(a)(ii) are that the tracing office is one which:

1. (1)

   maintains a database which:

   1. (a)

      accurately and reliably stores information submitted to it by firms for the purposes of complying with these rules;

   2. (b)

      has systems which can adequately keep it up to date in the light of new information provided by firms;

   3. (c)

      has an effective search function which allows a person inputting data included on the database relating to a particular employer over a particular period to retrieve information on the database relating to a potential employers’ liability claim corresponding to that employer and period;

2. (2)

   maintains adequate records of the director's certificates and reports prepared by an auditor sent to it by firms for the purposes of complying with these rules;

3. (3)

   has effective arrangements for information security, information back up and business continuity and to prevent the misuse of data;

4. (4)

   accepts search requests in relation to information in (1) relating to a potential claim from:

   1. (a)

      individuals with the potential claim, or their authorised representative; or

   2. (b)

      the employer to whom the potential claim relates; or

   3. (c)

      an insurer which is potentially jointly and severally liable with another firm in relation to the potential claim; or

   4. (d)

      a relevant insurance intermediary acting for an insurer in (c);

5. (5)

   provides responses to requests in (4) without delay;

6. (6)

   has adequate arrangements for providing to a firm, upon request and without delay, a full copy of the information on the database that the firm has provided to it;

7. (7)

   includes in its published annual report:

   1. (a)

      a certificate from the directors of the tracing office stating whether the tracing office has complied with the requirements in (1) to (6) in relation to the period covered by the annual report; and

   2. (b)

      an independent report commissioned under a reasonable assurance engagement satisfying the requirement in ICOBS 8.4.9A R, addressing the accuracy and completeness of the database, prepared by an auditor satisfying the requirements of SUP 3.4 and SUP 3.8.5 R to SUP 3.8.6 R, and addressed to the directors of the tracing office; and

8. (8)

   provides to a firm making use of the tracing office for the purposes of ICOBS 8.4.7R (1)(a)(ii):

   1. (a)

      a copy of its annual report promptly after publication; and

   2. (b)

      upon request and without delay a full copy of the information on the database that the firm has provided to it.

The requirement referred to in ICOBS 8.4.9R (7)(b) is that the report must include an opinion from the auditor confirming whether, in all material respects, the tracing office maintains a database which accurately and reliably stores information submitted to it by firms for the purpose of complying with relevant requirements in ICOBS 8.4 and that it has systems which can adequately keep it up to date in the light of new information provided by firms.

1. (1) [deleted]
2. (2) A firm producing an employers’ liability register must:
   1. (a) update the register with any new or more accurate information falling within ICOBS 8 Annex 1:
      1. (i) by virtue of the entry into or renewal of, or of a claim made in relation to, a policy, as required by ICOBS 8 Annex 1 Part 1; and
      2. (ii) in all other cases, by virtue of the firm having received that new or more accurate information;
   2. (b) make the updated information in (a) available, in accordance with ICOBS 8.4.7 R, no later than:
      1. (i) in relation to new or more accurate information arising out of the entry into or renewal of, or a claim made in relation to, a policy, three months from the date of entry, renewal or the date upon which the claim was made; and
      2. (ii) in all other cases, three months from the date upon which the firm received the new or more accurate information;
   3. (c) update the register, no less frequently than once every three months, and include the date that the register was updated and a statement that the register may be relied on as up-to-date as at a date three months prior to the date upon which the register was updated, or such later date as applicable to the firm;

1. (1)

   For the purposes of ICOBS 8.4.11R (2)(a), 8.4.11R (2)(b) and ICOBS 8 Annex 1 a claim is deemed to be made in relation to a policy at the date on which the firm establishes, or otherwise accepts, that it has provided relevant cover under the policy, and is therefore potentially liable subject to the terms of the policy.

2. (2)

   A firm must use reasonable endeavours to establish whether it has provided relevant cover:

   1. (a)

      within three months of being notified of a potential claim; or

   2. (b)

      if that is not possible, as soon as is reasonably practicable thereafter.

The transferor in an insurance business transfer scheme must provide the transferee with the information and documents the transferor holds in compliance with ICOBS 8.4 in respect of the insurance business transferred.

A firm with actual or potential liability for United Kingdom commercial lines employers' liability insurance claims must take reasonable steps to conduct effective searches of their records when they receive a request to carry out a search for a historical policy from persons falling into one of the categories in ICOBS 8.4.4R (2)(c) or a tracing office which meets the conditions in ICOBS 8.4.9 R.

A firm must put in place a written policy for complying with ICOBS 8.4.14 R and operate in accordance with it. The policy must cover at least the following matters:

1. (1)

   details of where the firm's historical policies are held or are likely to be held (including details of records which are archived or stored off site);

2. (2)

   details of the different types of records to be searched by the firm, such as electronic files, paper files, and microfiche; and

3. (3)

   details of how the searches will be carried out, including a description of how and in what circumstances the firm may decide not to conduct a search.

1. (1)

   When a firm receives a request under ICOBS 8.4.14 R, from a qualifying tracing office, it must provide a response, in writing, to the requestor within one month of receiving the request.

2. (2)

   This rule does not apply when the firm has conducted a search but no historical policies have been found.

3. (3)

   When a firm receives a request under ICOBS 8.4.14 R, other than from a qualifying tracing office, it must provide a response, in writing, to the requestor within two months of receiving the request in accordance with ICOBS 8.4.17 R.

1. (1)

   Where a firm has established that a historical policy does exist, the response should confirm what cover was provided and set out any available information that is relevant to the request received.

2. (2)

   Where there is evidence to suggest that a historical policy does exist, but the firm is unable to confirm what cover was provided, the response should set out any information relevant to the request and describe the next steps (if any) the firm will take to continue the search.

3. (3)

   Subject to ICOBS 8.4.16R (2), where the firm has conducted a search, but no historical policies have been found, the response should set this out clearly and explain that reasonable steps were taken to conduct an effective search.