We thought it appropriate to issue a New Year reminder for firms that have staff …

1. directly involved in the carrying on of the firm’s insurance distribution activities; or
2. within the management structure responsible for the firm’s insurance distribution activities; or
3. responsible for the supervision of a relevant employee acting in the capacity as set out in 1.

… of the requirements the FCA has laid down in SYSC 28 that can be viewed here.

It is a short chapter so we recommend that senior management remind themselves of the content.

Insurance products include, among others, general insurance, non-investment insurance and investment based insurance products (life bonds etc).

The requirements, in summary, are for staff to have the knowledge and ability to perform their role that includes 15 hours relevant CPD in a 12 months period; and

That staff should be of good repute i.e. they have a clean criminal record and have not been previously declared bankrupt.

The FCA made it clear in PS17_27 that it creates a continuous obligation on firms, however, other than “ahead of a staff member becoming involved in the firm’s insurance distribution activities” they do not prescribe a frequency.

The question is, which staff are directly involved in the carrying on of the firm’s insurance distribution activities?

CP17_7 includes commentary that “directly involved” includes management and sales managers but not ancillary roles such as HR, facilities management and IT, and as far as we are aware that is all that was published at the time. However, SMCR documents listed roles that the FCA considered to be ancillary and therefore out of scope of the Conduct Rules that included among others: receptionists, post room staff, events management, security guards, invoice processing, data controllers, cleaners, catering staff, secretaries, IT support & HR which, as you can see, the rules would include most staff at a typical ATEB firm selling insurance products.

For those firms with Appointed Representatives (AR) please ensure staff at the AR comply with these rules.

Firms should maintain records to demonstrate compliance of each individual’s compliance with the rules for at least 3 years after the employee stops carrying on the activity, be in a position to provide to the FCA the name of the person responsible for record keeping and provide records to the FCA if requested.