Insurance conduct regulation—COBS and ICOBS
Insurance conduct regulation—COBS and ICOBS

The following Financial Services guidance note provides comprehensive and up to date legal information covering:

  • Insurance conduct regulation—COBS and ICOBS
  • Background to COBS and ICOBS
  • Impact of UK and EU developments on insurance conduct requirements
  • What does COBS do?
  • What does ICOBS do?

The Financial Conduct Authority Handbook (FCA Handbook) includes sourcebooks to regulate the conduct of business by a regulated firm relevant to insurers: the Conduct of Business Sourcebook (COBS) and the Insurance Conduct of Business Sourcebook (ICOBS). This Practice Note considers how these sourcebooks apply to insurers.

COBS and ICOBS set out the 'conduct' aspects of how insurers and insurance intermediaries should operate their insurance business (from sales through to claims) and specifically how they should treat policyholders fairly.

COBS will apply to a firm if its activities consist of long-term insurance business in relation to life policies or designated investment business ('designated investment business'. ICOBS will apply to a firm in relation to its general insurance business and pure protection insurance business (also referred to as non-investment insurance).COBS 1.1.1 RICOBS 1.1.1 R

Where an insurance product falls to be dealt with by both sourcebooks, general market practice is to apply the more stringent COBS rules to reduce the possibility of a regulatory breach.

Background to COBS and ICOBS

When it was established by the Financial Services and Markets Act 2000 (FSMA 2000), the Financial Services Authority ((FSA), the predecessor to the Financial Conduct Authority (FCA)) and Prudential Regulation Authority (PRA) was given responsibility for regulating conduct of business relating to long-term insurance contracts in the Conduct of Business sourcebook (COBS), the FSA