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BRITISH INSURANCE BROKERS ’ ASSOCIATION

B. I. B. A. British Insurance Brokers’ Association. BRITISH INSURANCE BROKERS ’ ASSOCIATION. INSURANCE MEDIATION DIRECTIVE ( DON’T FORGET THE DISTANCE MARKETING & E- COMMERCE DIRECTIVES ). INSURANCE MEDIATION DIRECTIVE UK GOVERNMENT (TREASURY)

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BRITISH INSURANCE BROKERS ’ ASSOCIATION

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  1. B I B A British Insurance Brokers’ Association BRITISH INSURANCE BROKERS’ASSOCIATION

  2. INSURANCE MEDIATION DIRECTIVE ( DON’T FORGET THE DISTANCE MARKETING & E- COMMERCE DIRECTIVES )

  3. INSURANCE MEDIATION DIRECTIVE UK GOVERNMENT (TREASURY) - SETS SCOPE – MINIMUM REQUIREMENTS. - ENACTS LEGISLATION.

  4. INSURANCE MEDIATION DIRECTIVE UK GOVERNMENT (TREASURY) - SETS SCOPE – MINIMUM REQUIREMENTS - ENACTS LEGISLATION FINANCIAL SERVICES AUTHORITY (FSA) - AUTHORISE FIRMS AND INDIVIDUALS - SET RULES FOR CONDUCT - MONITOR COMPLIANCE AND ENFORCE

  5. TREASURY CONSULTATIONENDED JANUARY

  6. TREASURY CONSULTATIONENDED JANUARYWHICH INSURANCECONTRACTS?EXEMPTIONS ?

  7. TREASURY CONSULTATIONENDED JANUARY WHICH ACTIVITIES WILL BE REGULATED Introducing, proposing, carrying out work preparatory to contract Concluding contracts Assisting in the administration and performance of such contracts, in particular in event of claim. - Advising/arranging deals.

  8. WHO WILL BE REGULATED?

  9. WHO WILL BE REGULATED?INTERMEDIARIES, INCLUDES EMPLOYEES OF INSURERS FOR “RETAIL RISKS” APPOINTED REPRESENTATIVE REGIME TO APPLYDESIGNATED PROFESSIONAL BODY REGIME

  10. “PROPORTIONATE” REGULATION

  11. FSA OBJECTIVES. CONSUMER PROTECTION MARKET CONFIDENCE CONSUMER EDUCATION FINANCIAL CRIME

  12. FSA CONSULTATION PAPERS (C.P.’s) CP160 SELLING & ADMINISTRATION CLOSED 11/3 CP159 APPOINTED REPS (AR) CLOSED 31/3 CP174 PRUDENTIAL REQUIREMENTS CLOSED 13/6 CP180 FEES ( Also CP192 closes 28/10 ) CLOSED 24/6 CP 187 SELLING & ADMINISTRATION & MISC AMENDMENTS Closes 30/9

  13. TIMETABLE DRAFT REPORTING REQUIREMENTS SEPT 2003 FINAL AR RULES SEPTEMBER 2003 DRAFT CONDUCT OF BUSINESS RULES SEPT 2003 APPLICATION PACKS AVAILABLE “FINAL QUARTER” FINAL CONDUCT OF BUSINESS RULES JAN 2004 FEEDBACK APPLN FEES ( CP180 ) SEPT 03 CP ANNUAL FEES /FOS JAN2004 APPLICATIONS “EARLY” 2004 FSA REGULATION COMMENCES 14.01.05

  14. FSA CONSULTATION 160/187

  15. FSA CONSULTATION 160/187 CUSTOMER CLASSIFICATION - RETAIL - COMMERCIAL

  16. FSA CONSULTATION 160/187 CUSTOMER CLASSIFICATION - RETAIL - COMMERCIAL - STATUS DISCLOSURE - COMPLAINTS

  17. CP 160/187FAIR TREATMENT OF CONSUMERS

  18. CP 160/187 FAIR TREATMENT OF CONSUMERS - COMMISSION DISCLOSURE (COMMERCIAL) - UNFAIR INDUCEMENTS - EXCESSIVE CHARGES (RETAIL) - CANCELLATION RIGHTS (RETAIL) 14 DAYS

  19. CP 160/187FAIR TREATMENT OF CONSUMERS- COMMISSION DISCLOSURE - UNFAIR INDUCEMENTS. - CLAIMS HANDLING CLAIMS - FAIR AND PROMPTLY - PROMPT PAYMENT WHEN SETTLEMENT AGREED. - DISCLOSE ANY POTENTIAL CONFLICT OF INTEREST

  20. CP 160/187 STATUS DISCLOSURE RETAIL CUSTOMERS ( BEFORE CONCLUSION OF POLICY OR INCURRING FEES) • a) STATUTORY STATUS & HOW TO CHECK FSA REGISTER • b) CAPITAL OR VOTING RIGHTS HELD IN OR BY OTHER INSURANCE UNDERTAKINGS (10%) • c) HOW TO COMPLAIN TO THE FIRM & AVAILABILITY OF FOS • d) ANY FEES FOR ADVICE ( AS OPPOSED TO PRODUCT RELATED CHARGES )

  21. CP160/187 PRODUCT DISCLOSURE GIVE RETAIL CLIENTS ON DURABLE MEDIUM PRE COVER FACE TO FACE DISTANCE YES DISTANCE NO (POST/NET) (‘ PHONE) POL SUMMARY * * x PRICE INFO * * x HOW TO CLAIM * POL DOCUM’T * x CAN BE ORAL BUT MUST GIVE ALL INFO IMMEDIATELY AFTERWARDS

  22. CP160/187 PRODUCT DISCLOSURE RETAIL CUSTOMERS - KEY INFO: BENEFITS/EXCLUSIONS UNBUNDLE PREMIUMS / ADVISE IF INSURANCE OPTIONAL? - POLICY SUMMARY / “SIGN POSTING” - RENEWALS MUST BE PROVIDED TO THE CUSTOMER ON “DURABLE MEDIUM” 21 DAYS BEFORE POLICY EXPIRES

  23. CP 159 APPOINTED REPRESENTATIVES (AR) “AR ACTS AS AGENT FOR AUTHORISED FIRMS WHICH ACCEPT CONTRACTUAL RESPONSIBLE (IN WRITING) FOR CERTAIN ACTIVITIES”

  24. CP 159 - AN AR IS EXEMPT FROM AUTHORISATION

  25. CP 159 • AN AR IS EXEMPT FROM AUTHORISATION • REGISTER FOR AR • CANNOT BE EXEMPT AND AUTHORISED

  26. CP 159 • SUBSTITUTABLE PRODUCT CATEGORIES • SINGLE/MULTI PRINCIPAL REGIME. • INTER PRINCIPAL AGREEMENTS

  27. CP 159AR ACTIVITIES - CAN INTRODUCE, ARRANGE, ADVISE

  28. CP 159AR ACTIVITIES • CAN INTRODUCE, ARRANGE, ADVISE • MONEY RESTRICTIONS

  29. CP 159AR ACTIVITIES • CAN INTRODUCE, ARRANGE, ADVISE • MONEY RESTRICTIONS • NO CLAIMS INVOLVEMENT • ? CONCLUDE

  30. CP 159AR ACTIVITIES • CAN INTRODUCE, ARRANGE, ADVISE • MONEY RESTRICTIONS • NO CLAIMS INVOLVEMENT INTRODUCER AR

  31. CP 174PRUDENTIAL AND OTHER REQUIREMENTS • PERIMETER GUIDANCE • HIGH LEVEL STANDARDS SYSTEMS AND CONTROLS. • FINANCIAL RESOURCE • COMPENSATION • LLOYDS

  32. CP 174INTERMEDIARIES FINANCIAL RESOURCE SECURITY COMPENSATION SCHEME P.I. SEGREGATED A/C CAPITAL

  33. CP 174PROFESSIONAL INDEMNITY - LIMITS £1M OR 3 X INCOME MAX £10M. - ALTERNATIVE GROUP G’TEES.

  34. CP 174SEGREGATED ACCOUNTS - COMPULSORY, UNLESS RISK TRANSFERRED

  35. CP 174SEGREGATED ACCOUNTS • COMPULSORY UNLESS RISK TRANSFERRED • STATUTORY TRUST FOR “PRIVATE”

  36. CP 174SEGREGATED ACCOUNTS • COMPULSORY UNLESS RISK TRANSFERRED • STATUTORY TRUST FOR “PRIVATE” • VOLUNTARY TRUST “NON-PRIVATE” • AUDIT

  37. CP 174CAPITAL. NOT HOLDING CLIENT MONEY - MIN 5K OR 5% OF INCOME HOLDING CLIENT MONEY - MIN 10k OR 5% OF INCOME OR 5% OF CLIENT MONEY BALANCES. - INTANGIBLES

  38. CP 174COMPENSATION • EXTEND FSCS • LEVELS 90%, 100% COMPULSTORY • ALREADY INCLUDES “NON PRIVATE” TO £1M TURNOVER

  39. CP 174APPROVED PERSONS

  40. CP 174APPROVED PERSONS • NUMBERS LINKED TO EXECUTIVE BOARD • SMALLER FIRMS ANTICIPATED ONE PERSON WILL MEET CRITERIA

  41. CP 180 APPLICATION FEES • < 31/5 > 31/5 • INCOME e - mail paper e-mail paper • 0 - 1m 500 600 1,100 1,200 • 1 - 25m 8,750 8,750 10,750 11,000 • >25 m 22,500 23,000 24,500 25,000

  42. CP 180FINANCIAL SERVICES COMPENSATION SCHEME • - COMPENSATION FUND LEVY • “Pay as you go” • - MANAGEMENT EXPENSES LEVY • Consultation rules & funding in CP Jan 04

  43. CP180 FINANCIAL OMBUDSMAN • -GENERAL LEVY • - ( IFA 2003/4 £20 per Approved Person • Subject to Minimum £75 per firm ) • - CASE FEE • - £360 per case or £600 per “special” case

  44. CP192 FEES( SUPPLEMENT 180 ) • SUGGESTS THAT DIRECT INSURERS SHOULD HAVE “WEIGHTING” OF 10% ON PREMIUMS TO ARRIVE AT FIGURE ON WHICH THEIR FEES WILL BE CALCULATED • EQUATES TO 9.O9% ? IS THIS ENOUGH ?

  45. EXTERNAL COSTS • APPLICATION FEE • PERIODIC FEES • FINANCIAL SERVICES COMPENSATION • FINANCIAL OMBUDSMAN SERVICE

  46. BROKER COSTS • PROFESSIONAL INDEMNITY INSCE • CAPITAL REQUIREMENTS • TRAINING & COMPETENCE • SYSTEMS ( ? I/T )

  47. BROKER BENEFITS • LEVEL PLAYING FIELD • LESS COMPETITION FOR BROKER SECTOR • MORE ROBUST BUSINESSES • MORE VIBRANT BROKER SECTOR

  48. NEXT STEPS • BE PREPARED - DON’T BE SCARED • BUSINESS & COMPLIANCE PLAN • GAP ANALYSIS & PROJECT PLAN • BE AWARE - HAVE YOUR SAY

  49. B I B A British Insurance Brokers’ Association BRITISH INSURANCE BROKERS’ASSOCIATION

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