Regulatory Alerts2021-10-21
Guidance on Disclosure under the AIR Code
The Guernsey Financial Services Commission issued this guidance to address compliance difficulties with written disclosure requirements for general insurance intermediaries. It permits licensees and authorized representatives to provide mandatory written disclosures after advice or policy inception when immediate telephone arrangements make prior disclosure impractical. This exemption applies exclusively to general insurance products, while long-term product providers must strictly adhere to the original timing requirements of the Rules and Code.
1 GUERNSEY FINANCIAL SERVICES COMMISSION Guidance on Disclosure under the AIR Code November 2021 The Commission has received useful feedback that particular requirements of the Insurance Intermediaries Rules, 2021 (“the Rules”) and the Code of Conduct for Authorised Insurance Representatives (“the Code”) are proving difficult to comply with in the normal course of business. The particular requirements are as below: Insurance Intermediaries Rules 2021 7.4.4 Disclosure (1) Before a licensee provides insurance intermediary services to a client, it must disclose to him in writing the services, products offered and the expertise of the licensee. Code of Conduct for Authorised Insurance Representatives 3.2. Prior to providing advisory services to a client, an authorised insurance representative shall: 3.2.2. disclose to the client in writing the classes of insurance and products upon which he is authorised to provide advice; 3.2.3. disclose to the client in writing the range, scope and any limitations in the product providers and/or products upon which he is able to provide advice. The issue arises where general insurance quotations are provided, and insurance policies arranged over the telephone. It may not be practical for an intermediary to suspend an enquiry or conversation in order to provide the written disclosure required under the Rules and Code. For the avoidance of doubt, The Commission will permit an intermediary to provide the necessary disclosures as soon as reasonably practicable where it is not viable to provide it prior to advising on, or arranging a general insurance product. For example, where a client wishes to insure a vehicle immediately, the intermediary may provide the client with a quotation, and place cover without making the written disclosure. The disclosure must still be made, but may be done so after advice has been given or the policy has incepted. Where the written disclosure can reasonably be made prior to providing advisory services, then the licensee must do so, this would include face to face and online facilities. To be clear, the above guidance only applies to general insurance products; licensees and AIRs, including those authorised as Financial Advisers, dealing with long-term products must comply with the Rules and Code as written. inadequate monitoring. Issued: July 2015
2 Reissued: xxx 2021