Insurance distribution activities—law firms

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

  • Insurance distribution activities—law firms
  • Insurance distribution regime
  • What are insurance distribution activities?
  • Insurance distribution regime definition
  • SRA definition
  • Insurance distribution v introduction
  • General prohibition on insurance distribution activities
  • Ancillary insurance intermediary activities
  • Internal governance
  • Insurance distribution officer
  • More...

Insurance distribution activities—law firms

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 regime. It also reflects the SRA Financial Services (Scope) Rules and SRA Financial Services (Conduct of Business) Rules, in force from 25 November 2019.

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

Insurance distribution regime

The UK insurance distribution regime dates back to the Insurance Distribution Directive (Directive (EU) 2016/97) (IDD). In the UK, the IDD was predominantly implemented by the FCA and the Insurance Distribution (Regulated Activities and Miscellaneous Amendments) Order 2018, SI 2018/546, which amended relevant provisions of the Financial Services and Markets Act 2000 (FSMA 2000), the Financial Services and Markets Act 2000 (Regulated Activities Order) 2001, SI 2001/544, and other regulations made under FSMA 2000.

The Insurance Distribution (Amendment) (EU Exit) Regulations 2019 address deficiencies in retained

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