Insurance conduct regulation—COBS and ICOBS

The following Financial Services practice 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
  • Retail Distribution Review
  • The MiFID II Framework, the IDD and the PRIIPs Regulation
  • FCA implementation of EU insurance conduct requirements
  • What does COBS do?
  • Client categorisation (COBS 3)
  • Financial promotion (COBS 4)
  • Information about the firm, its services and remuneration (COBS 6)
  • More...

Insurance conduct regulation—COBS and ICOBS

BREXIT: 11pm (GMT) on 31 December 2020 (‘IP completion day’) marked the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. Following IP completion day, key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see: Brexit and financial services: materials on the post-Brexit UK/EU regulatory regime.

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).

Where an insurance product falls to be dealt with by both sourcebooks, general market practice is to apply the more stringent COBS rules

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