Advising Insurance Contracts

I’m always advising mortgage advisers to sell insurance to their clients. It’s morally correct, certainly needed by clients, not expensive and pays a commission. However, to do so, you need to ensure you’re trained with the relevant FCA permissions.

We’re talking life, income protection, critical illness, and ASU policies. No hint of investment in these plans.

Also, you must follow COBs or ICOBS – Insurance Conduct of Business Rules.

Conduct of Business Rules are those for independent investment advisers. Many IFA firms already adhering to COBs just have to apply these to the sale of insurance otherwise its ICOBS. Even if you are a mortgage firm, you must subscribe to ICOBS.

So they’re important and what are they:

  • Authorisation – the firm must be authorised with the FCA
  • Qualifications – you now need CPD – continued professional development – 15 hours in total plus be appropriately trained in the first place.
  • Eligibility – this one is a bit obvious really – if you’re selling a plan you must make sure the client would be eligible to claim
  • Suitability – identified needs, factfinding, suitability – say no more
  • Statement of Demands and Needs – replaces the need for a suitability report but much the same thing
  • Cancellation rights – 30 days; buildings and contents have 14 days

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