New rules on insurance distribution from 1 October 2018
The Insurance Distribution Directive is a new European directive that replaces the Insurance Mediation Directive. Firms carrying on insurance distribution activities will need to change the way they work.
The directive is designed to ensure a level playing field across all those providing, facilitating and arranging insurance products. It also seeks to strengthen consumer protections for clients, such as improving the information they receive.
Firms involved in personal injury, conveyancing and probate are most likely to be affected. For example, they might arrange after-the-event insurance in a personal injury matter or defective title insurance in a conveyance. There may be other insurance products that firms advise on or arrange for their clients in other areas of law.
The Solicitors Regulation Authority (SRA) consulted on proposed changes to the Handbook to cater for these new requirements. The changes have now been approved by the Financial Conduct Authority and the Legal Services Board.
All firms should therefore assess their own individual practices and make sure they are up to date and able to comply with the revised rules. The SRA will be writing to a number of firms that have indicated that they carry on insurance mediation activities in their response to last year’s Financial Services Activities questionnaire.
View the new requirements on the SRA website