ICOBS
ICOBS is our insurance conduct of business sourcebook, the rules for the sale of general and protection insurance products.
ICOBS has three levels:
- High-level standards and a few detailed rules that apply to all products.
- Additional rules for pure protection contracts –such as critical illness, income protection, term assurance and payment protection insurance (PPI).
- Additional rules for PPI.
The overall aim is for you to treat your customers fairly and give them clear, fair and not misleading information when you sell them insurance.
What are the high-level standards?
Suitability
You must take reasonable care to ensure your advice is suitable for your customers.
There is detailed guidance for the sale of pure protection contracts and PPI. This includes guidance that a firm should take reasonable care to ensure a policy is suitable for the customer's demands and needs, taking into account the policy's level of cover and cost, and relevant exclusions, limitations and conditions.
Product disclosure
You must take reasonable steps to ensure your customer is given appropriate information about a policy in good time and in a comprehensible form so they can make an informed decision.
This applies both before and after they buy the product and it includes price. The information you give will depend on the customer, the policy's terms and its complexity.
Claims handling
Insurers or those acting for them must treat customers fairly when handling claims.
ICOBS introduces extra standards for higher-risk products
If your firms sells PPI and pure protection contracts you will have to:
- Tell your customers who havent been given advice that they are solely responsible for deciding whether the policy is suitable for their needs.
- Tell your customers orally about the main characteristics of a policy (significant benefits, limitations and exclusions, duration and price) during sales conversations before the customer makes a decision on whether to buy the cover.
If your firm sells PPI you will also have to:
- Take reasonable steps to check customers are eligible to claim under the policy before you sell the insurance and tell customers if they would not be able to claim under one or more elements of a policy.
- Remind customers of their right to cancel the policy within 30 days and that they should check the policy documentation within the cancellation period.
- For single-premium PPI, tell customers during any sales discussion of the monthly and total price of the cover and that they will pay interest on the premium.
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