Insurance Mediation Directive
From the 1st October new SRA rules will take effect to cater for the above EU directive which will replace the Insurance Mediation Directive.
Law firms carrying out insurance distribution activities will be caught by this new directive. These firms will therefore include those who recommend/organise insurance products such as after the event insurance (PI firms), third party cost insurance (PI firms) and defective title and other property related indemnity insurance (conveyancing firms).
According to the Law Society the SRA will be writing to firms who carry on insurance mediation activities explaining what needs to be done to comply with the new directive.
Some of the key requirements of the directive include:
- Staff training (minimum 15 hours per year) for staff involved directly in insurance distribution activities.
- Prescribed minimum levels of PI insurance cover
- Process to deal with complaints
- Systems to ensure that firms act fairly and in the best interests of the client
- The need to communicate with clients in a fair, and not misleading way
- Making sure that any remuneration considerations do not conflict with a duty to always act in the client;’s best interests
- An obligation to disclose detailed information about the insurance product involved through a “Product Information Document”
The SRA has made amendments to the Regulatory Arrangements (Insurance Distribution) Rules 2018 and these will come in to effect on the 1st October. They can be accessed via the SRA website