Insurance distribution activities—law firms
Insurance distribution activities—law firms

The following Practice Compliance guidance note provides comprehensive and up to date legal information covering:

  • Insurance distribution activities—law firms
  • What are insurance distribution activities?
  • Insurance distribution v introduction
  • General prohibition on insurance distribution activities
  • Ancillary insurance intermediary activities
  • Internal governance
  • Conflict and remuneration
  • Complaints
  • Transparency requirements
  • Suitability of proposed insurance contract
  • more

As a general rule, law firms are not permitted to engage directly in insurance distribution activities, unless they are licensed by the FCA. This Practice Note focuses on law firms engaging in insurance distribution activities in the capacity of an ancillary insurance intermediary, which is permitted. This is most likely to be relevant to law firms engaging in conveyancing, personal injury or private client work, who arrange ancillary insurance such as defective title insurance, or after-the-event insurance for legal fees or a seven-year plan for inheritance tax.

This Practice Note reflects regulatory requirements applying to law firms from 1 October 2018 under the Insurance Distribution Directive (Directive (EU) 2016/97) (IDD), which replaced the Insurance Mediation Directive (Directive 2002/92/EC) (IMD). It also reflects the SRA Financial Services (Scope) Rules 2001 and SRA Financial Services (Conduct of Business) Rules 2001.

For guidance on insurance mediation activities before 1 October 2018, see Practice Note: Insurance mediation activities—regulatory requirements [Archived].

See also Precedent: Letter recommending insurance–demands and needs—law firms.

What are insurance distribution activities?

The SRA’s definition of insurance distribution activity, somewhat unhelpfully, does not reflect the definition in the underlying IDD. This is important because while the SRA’s Scope and COB Rules relate to insurance distribution activities as defined by SRA:

  1. you must always have one eye on the underlying substantive law, and

  2. the removal of