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The Insurance Distribution (Regulated Activities and Miscellaneous Amendments) Order 2018

As Enacted Cited authorities 82 Cited in Related
Vincent
JurisdictionUK Non-devolved
CitationSI 2018/546

2018 No. 546

Financial Services And Markets

The Insurance Distribution (Regulated Activities and Miscellaneous Amendments) Order 2018

Made 30th April 2018

Laid before Parliament 1st May 2018

Coming into force in accordance with article 1(2)

The Treasury are designated1for the purposes of section 2(2) of the European Communities Act 19722in relation to financial services.

The Treasury make this Order in exercise of the powers conferred on them by section 2(2) of the European Communities Act 1972 and sections 1A(6)(d), 1L(2)(b), 22(1) and (5), 39(4)(b), 66A(4)(b), 168(4)(k), 204A(2) and (4), 380(6)(a), 382(9)(a), 384(7) and (10), 409(1), 426 and 428(3) of, and paragraph 23(2) of Schedule 1ZA to, and paragraph 25 of Schedule 2 to, and paragraphs 13(1)(b), 14(1)(b) and 17(b) of Schedule 3 to, the Financial Service and Markets Act 20003.

1 General

PART 1

General

Citation, commencement and interpretation
S-1 Citation, commencement and interpretation

Citation, commencement and interpretation

1.—(1) This Order may be cited as the Insurance Distribution (Regulated Activities and Miscellaneous Amendments) Order 2018.

(2) This Order comes into force—

(a)

(a) on the 22nd day after laying to enable rules to be made under section 137R (financial promotion rules) of the Act as amended by article 11; and

(b)

(b) on 1st October 2018 for all other purposes.

(3) In this Order—

“the Act” means the Financial Services and Markets Act 2000;

“the principal Order” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 20014.

2 Amendments to the principal Order

PART 2

Amendments to the principal Order

Amendments to the principal Order
S-2 Amendments to the principal Order

Amendments to the principal Order

2. This Part amends the principal Order.

Specified activities: general
S-3 Specified activities: general

Specified activities: general

3. In article 4 (specified activities: general)—

(a) for paragraph (4A)5substitute—

S-4A

“4A Where a person, other than an ancillary insurance intermediary carrying out insurance distribution activities falling within Article 1.3 of the insurance distribution directive (the text of which is set out in Part 1 of Schedule 4)—

(a) for remuneration, takes up or pursues insurance distribution, or reinsurance distribution, in relation to a risk or commitment located in an EEA State, and

(b) in doing so would be treated as carrying on an activity of a specified kind by a provision of this Part but for an exclusion in any of articles 30, 66, 67 and 72AA,

that exclusion is to be disregarded (and accordingly that person is to be treated as carrying on an activity of the kind specified by the provision in question).”, and

(b) for paragraph (5)6substitute—

S-5

“5 In this article—

“ancillary insurance intermediary” has the meaning given by Article 2.1(4) of the insurance distribution directive, the text of which is set out in Part 4 of Schedule 4;

“insurance distribution” has the meaning given by Articles 2.1(1) and 2.2 of the insurance distribution directive, the text of which is set out in Parts 2 and 5 of Schedule 4, respectively; and

“reinsurance distribution” has the meaning given by Articles 2.1(2) and 2.2 of the insurance distribution directive, the text of which is set out in Parts 3 and 5 of Schedule 4, respectively.”.

Activities: arranging deals in investments – exclusions

Activities: arranging deals in investments – exclusions

S-4 In article 33 (introducing), for paragraph (d) , substitute— d...

4. In article 33 (introducing), for paragraph (d)7, substitute—

“(d)

“(d) The arrangements—

(i) are made with a view to a person entering into a transaction which does not relate to a contract of insurance, or

(ii) are of the type specified in article 33B (provision of information – contracts of insurance).”.

S-5 After article 33A (introducing to authorised persons etc.) ...

5. After article 33A (introducing to authorised persons etc.)8insert—

S-33B

“Provision of information – contracts of insurance

33B.—(1) There is excluded from article 25(1) and (2) (arranging deals in investments) the making of arrangements for, or with a view to, a transaction for the sale or purchase of a contract of insurance, where that activity meets the conditions specified in paragraphs (2) and (3).

(2) The conditions specified in this paragraph are that the activity—

(a)

(a) consists of the provision of information about a potential policyholder to a relevant insurer or an insurance or reinsurance intermediary, or

(b)

(b) consists of the provision of information to a potential policyholder about—

(i) a contract of insurance, or

(ii) a relevant insurer or insurance or reinsurance intermediary.

(3) The condition specified in this paragraph is that the provider of the information does not take any step other than the provision of information to assist in the conclusion of a contract of insurance.

(4) In this article—

“insurance intermediary” has the meaning given in Article 2.1(3) of the insurance distribution directive;

“reinsurance intermediary” has the meaning given in Article 2.1(5) of the insurance distribution directive;

“relevant insurer” has the meaning given in article 39B(2) (claims management on behalf of an insurer etc.).”.

Activities carried on by a provider of relevant goods or services – exclusions
S-6 Activities carried on by a provider of relevant goods or services – exclusions

Activities carried on by a provider of relevant goods or services – exclusions

6. In article 72B(1) (activities carried on by a provider of relevant goods or services)9—

(a) in the definition of “connected contract of insurance”—

(i) omit paragraph (b);

(ii) for paragraph (c), substitute—

“(c)

“(c) has a premium of—

(i) 600 euro or less (calculated on a pro rata annual basis), or

(ii) where the insurance is complementary to a service being provided by the provider and the duration of that service is equal to or less than three months, 200 euro or less,

or equivalent amounts of sterling or another currency;”;

(iii) at the end of paragraph (d)(i), omit “or”;

(iv) after paragraph (d)(i), insert—

“(ia)

“(ia) the non-use of services supplied by the provider; or”;

(v) at the end of paragraph (e), add “and”;

(vi) omit paragraph (g) and the “and” immediately preceding it; and

(b) in the definition of “provider”, for “non-motor goods”, substitute “non-motor goods or services”.

Unauthorised persons carrying on insurance distribution activities
S-7 Unauthorised persons carrying on insurance distribution activities

Unauthorised persons carrying on insurance distribution activities

7.—(1) Part 5 (unauthorised persons carrying on insurance mediation activities)10is amended as follows.

(2) In the heading, for “MEDIATION”, substitute “DISTRIBUTION”.

(3) In article 92 (interpretation), in the definition of “insurance mediation activity”, for “mediation”, substitute “distribution”.

(4) In article 93 (duty to maintain a record of persons carrying on insurance mediation activities)—

(a)

(a) for “mediation”, in each place it occurs (including in the heading), substitute “distribution”; and

(b)

(b) after paragraph (3), insert—

S-3A

“3A An application for inclusion in the record made by a person who falls within paragraph (2) or (3) must be determined by the FCA before the end of the period of 3 months beginning with the date on which it received the completed application.

S-3B

3B A notification by a designated professional body in accordance with article 94 is to be treated as an application for inclusion in the record for the purposes of paragraph (3A).”.

(5) In article 94 (members of designated professional bodies) for “mediation”, in each place it occurs, substitute “distribution”.

(6) In article 95 (exclusion from record where not fit and proper to carry on insurance mediation activities)—

(a)

(a) in the heading, and in paragraph (1), for “mediation”, substitute “distribution”; and

(b)

(b) after paragraph (1) insert—

S-1A

“1A In making a determination as to whether a person is a fit and proper person for the purposes of paragraph (1), the FCA must consider whether the relevant registration conditions under Article 3 of the insurance distribution directive are met.”.

(7) In article 96 (exclusion from the record where FCA has exercised its powers under Part 20 of the Act), in paragraphs (2) and (3), for “mediation”, substitute “distribution”.

Relevant text of the insurance distribution directive
S-8 Relevant text of the insurance distribution directive

Relevant text of the insurance distribution directive

8. For Schedule 411, substitute—

“SCHEDULE 4

Article 4

Relevant Text of the Insurance Distribution Directive

PART 1

Article 1.3

“This Directive shall not apply to ancillary insurance intermediaries carrying out insurance distribution activities where all the following conditions are met—

(a) the insurance is complementary to the good or service supplied by a provider, where such insurance covers—

(i) the risk of breakdown, loss of, or damage to, the good or the non-use of the service supplied by that provider; or

(ii) damage to, or loss of, baggage and other risks linked to travel booked with that provider;

(b) the amount of the premium paid for the insurance product does not exceed EUR 600 calculated on apro rataannual basis;

(c) by way of derogation from point (b), where the insurance is complementary to a service referred to in point (a) and the duration of that service is equal to, or less than, three months, the amount of the premium paid per person does not exceed EUR 200.”

PART 2

Article 2.1(1)

“For the purposes of this Directive “insurance distribution” means the activities of advising on, proposing, or carrying out other work preparatory to the conclusion of contracts of insurance, of concluding such contracts, or of assisting in the administration and performance of such contracts, in particular in the event of a claim, including the provision of information concerning one or more insurance contracts...

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