New rules are being introduced on 01 April 2017 that will require changes to the documentation that general insurance intermediaries issue at renewal. We first highlighted these changes back in August 2016 – see the article here.
You can see the new rules that come into force in a few weeks time either in Appendix 1 of the relevant policy statement Increasing transparency and engagement at renewal in general insurance markets: PS16/21 or by accessing the FCA Handbook, setting the handbook date to 01/04/2017 * and reading ICOBS 6.1.
* to do this tick ‘show timeline’ to the left of the FCA Handbook main menu and select the date required.
Although the number of changes is relatively small, they are important and need some careful thought. Please note the following:
- The new rules apply for Consumer clients only, for an insurance contract that is not a group policy and which has a duration of 10 months or more;
- The rules apply independently to insurance provider and insurance broker. The broker must meet all the rule requirements independently of any documentation issued by the provider.
- Different wording is required depending on whether it is renewal number 1 to 3 or renewal number 4 and above;
- If it is renewal number 1 to 3, you have some flexibility in deciding what words to use – although ATEB recommends that you stick as closely as possible to those used in the rules;
- For the fourth renewal and above, FCA prescribed wording must be used;
- The positioning and relationship between the new text is important – see ICOBS 6.1.12 A (c).