News release
European Insurance Distribution Directive approach approved
5 July 2018
We have had our approach to dealing
with the new European Insurance Distribution Directive approved by
the Financial Conduct Authority (FCA) and Legal Services Board
(LSB).
The Directive means that firms
carrying on insurance distribution activities will need to change
the way they work. Replacing the Insurance Mediation Directive, the
new Directive aims to strengthen protections in place for clients,
such as improving the information they receive.
We consulted on proposed changes to
the Handbook to cater for these new requirements. The changes have
now been approved by the FCA and the LSB and published on our
website. Guidance on the new directive, which comes into effect
from 1 October, will also be made available.
Paul Philip, SRA Chief
Executive, said: "Our changes meet the requirements of the
new Directive without putting unnecessary burdens on firms. For
example, in many areas our Code of Conduct already covers what is
needed.
It's important that firms make sure
they are up to date with the revised requirements, so that they can
provide a proper service to their clients"
Some of the key enhancements brought
in by the directive and that firms will need to familiarise
themselves with are:
- Professional and organisational requirements
- Conduct of business requirements
- Information requirements
- Demands and needs of their client
Firms working in personal injury,
conveyancing or 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.
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. We 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.
Read the directive requirements