Round Up Autumn 2018

9 features Directive (IDD) Here we take a high level look at some of the major issues. We don’t cover everything. It’s important that you refer to the IDD guidance and project plan on our website, to ensure that you are prepared prior to 1 October. Suitability For IBIPs the suitability assessment requirements introduced for other investment business through MiFID II have largely been adopted. There are also changes relating to the circumstances a suitability report must be issued and its timing. Where you have undertaken to provide an ongoing service to your clients you will also have an obligation to undertake periodic suitability assessments. For insurance products that aren’t IBIPs, such as pure protection contracts, when providing a personal recommendation, you must, in addition to the statement of demands and needs, provide the client with a personalised explanation of why a particular contracts of insurance would best meet their demands and needs. Product Governance Product governance refers to the systems and controls for design, approval, marketing and ongoing management of products throughout their life cycle. There will be new product oversight and governance arrangements for manufacturers and distributors of insurance products. For example, you will need to have documented distribution procedures which: -- Are endorsed and overseen by your senior management team and reviewed regularly to check that they’re still valid and up to date. For example, making sure that products are getting to the right target market. -- Take all reasonable steps to obtain information from the product provider about the product itself, the product approval process and the identified target market. -- Understand the products that you distribute and identify the target market for which a product is likely to be suitable. Training & Competence The FCA T&C requirements are being extended to firms carrying on insurance distribution activities. There is a new minimum knowledge requirement although no mandatory qualifications for non-investment insurance advisers. The knowledge and competence requirements will apply to any staff involved in insurance distribution such as advisers, supervisors and the person responsible for insurance intermediation in your firm. For these individuals a minimum of 15 hours annual CPD in relation to insurance distribution activities will be required. PI Insurance For firms that undertake insurance intermediation the required indemnity limits are increasing as follows: Per claim: the required minimum limit of indemnity on a firm’s PII cover for a single claim per year will be €1,250,000 (currently €1,120,200). In aggregate: the required minimum limit of indemnity on a firm’s PII cover in the aggregate per year will be €1,850,000 (currently €1,680,300) If taking out or renewing PI cover before 1 October 2018, we recommend you to request the higher levels of cover from outset. Where your PI policy isn’t due to be renewed until after 1 October 2018, you should speak to your PI broker or insurer to ensure the appropriate cover is in place from that date. 1 3 2 4