Insurance2day Insurance Services Ltd – Renewal Procedures – Consumers
These procedures are to be followed for Insurance2day Insurance Services Ltd (I2D) consumer clients for the renewal of a policy with a duration of no more than one year. If a policy is longer than one year’s duration, or the consumer requests an extension of the policy (of less than one year), the renewal must be treated as a new sale and all the information shown in the new business procedures must be provided to the consumer. Different rules may apply for policies of a month or less that renew automatically.
Prior to Renewal
- At all times the I2D representative must act in accordance with the Customer’s Best Interests rule and pay due regard to the interests of its customers and treat them fairly.
- The I2D representative must, in good time before expiry of the policy, contact the consumer to advise of the forth coming renewal, update any fact find held by the firm, revisit the client’s demands and needs and advise on the scope of service to be provided at renewal.
- The I2D representative must check whether any previously purchased Optional Additional Products have been sold on an Opt In basis and that the client fully understands the cost of the optional additional cover, the scope of the cover and that the product is optional. If this is not the case, the Optional Additional Product must be sold on an opt in basis at renewal.
- The I2D representative must provide appropriate information about renewal in good time and in a comprehensible format so that the consumer can make an informed purchasing decision. or
- The I2D representative must notify the consumer in good time before expiry of the policy if, for any reason, renewal will not be invited. As a benchmark the I2D representative should take ‘in good time’ to be no less than 21 days before expiry of the policy.
The information to be provided to a consumer will vary dependent on:-
(i) The knowledge, experience and ability of a typical consumer for the policy
(ii) The policy terms including main benefits, exclusions, limitations, conditions and its duration
(iii) Overall complexity of the policy
(iv) Whether the policy is bought in connection with other goods or services
(v) Distance communication requirements
(vi) Whether the same information has been provided to consumers previously and if so when.
It should be noted that just because the consumer may have cancellation rights under the policy this does not affect the information they require to make an informed purchasing decision.
Insurers dealing with consumers will need to issue an Insurance Product Information Document (IPID) which I2D representative must give to the consumer.
- If there have been any changes to I2D ’s Terms of Business document (Status Disclosure: General) the I2D representative should ensure that the customer is provided with a link to the up to date Terms of Business document. If there have been no changes to the Terms of Business Document there is no requirement to issue the same however, the I2D representative must be able to demonstrate that the consumer has received a copy of the current Terms of Business Document within the last 12 months and for the sake of good practice should confirm to the consumer that the previously issued Terms of Business Document continues to apply.
- If different from the basis on which the insurance was incepted the I2D representative must confirm whether they will:
– Advise and make a personal recommendation after they have assessed the consumer’s needs; or
– Not provide advice or a recommendation.
- The I2D representative must provide the consumer with a statement of their demands and needs based on information gathered from them. The statement of demands and needs must be tailored to the individual client and should include reference to the underlying reasons for any advice / recommendation made. If the renewal is a non-advised sale the consumer must still be issued with a demands and needs statement tailored to reflect this type of sale.
- If different from the scope of service on which the insurance was incepted, the I2D representative must describe the basis upon which renewal is offered i.e.:
a. A fair and personal analysis of the market;
b. A limited number of insurers (a list of insurers must be provided)
c. A single insurer.
- The I2D representative must confirm any changes to the terms and conditions of the policy. If there have been no changes to the policy terms and conditions at renewal the I2D representative should consider confirming the same to the insured.
- The I2D representative must confirm any changes advised by the insurer, including any changes in the way the insurer operates or any changes in the manner in which the insurer handles the insurance that may affect the consumer.
- The I2D representative must confirm each premium, fee, ongoing administration charge, and IPT amount for the insurance products and services being renewed. The I2D representative should remind the consumer of their payment options, including the APR and interest rate on any credit arrangements and the total cost of paying by instalments.
- In addition to the renewal premium the I2D representative must prominently state, on the first page of the renewal correspondence, last year’s premium. If there have been any mid-term adjustments during the year that have resulted in a permanent change to the policy the last years premium should include the annualised figure for the midterm adjustment(s). Premiums displayed can include commission and IPT but must not include any fees or charges.
- The I2D representative must ensure that the appropriate transparency disclosure is included in the renewal correspondence. See note below.
- If the renewal is in respect of a Motor Policy and includes optional No Claims Bonus Protection Discount then the I2D representative must ensure that the NCB protection Statement and the NCB Protection Information are provided to the consumer.
- The I2D representative should draw Information about the consumer’s cancellation rights to the consumer’s attention.
- Any renewal information which is given verbally to the consumer must be promptly confirmed in writing or other durable medium prior to conclusion of the renewal. If it is not possible to provide the information in writing or other durable medium prior to conclusion of the renewal it must be provided immediately after.
- Renewal documentation should be issued promptly in line with ABI Contract Certainty Guidelines.
- If the policy is re-broked and an alternative insurer recommended I2D’s new business procedures for consumers should be followed to ensure that the client is issued with all the require ICOBS Disclosure Information.
Change in scope of service
A general insurance policy which is arranged on the basis of:
a. a personal recommendation being given by the intermediary and/or
b. a fair and personal analysis of the market
may be renewed on a ‘non-advised’ basis with a ‘fair analysis’ of the market not being undertaken as long as the demands and needs statement is re-issued and the renewal letter shows the new basis of the sale.
This means that at renewal, an intermediary may offer only the existing Insurers’ terms, without a recommendation, as long as the information mentioned above is supplied to the client.
Transparency at Renewal Disclosure
At each renewal, I2D must remind the consumer that there is the option to shop around. The following wording is to be used on the first page of the renewal letter:
N.B. We are required by our regulatory body to advise that where you have been insured with us for a number of years, you may be able to get a better price for the insurance cover you want if you shop around.
The above information must be provided clearly accurately and prominently. Having the information on the first page of the renewal notice meets the prominent requirement.
Optional Additional Products
Please refer to the optional additional products renewal procedures if you are in any doubt about how optional additional products should be sold.