Regulation Updates – British Insurance Brokers' Association https://www.biba.org.uk The British Insurance Brokers' Association is the UK's leading general insurance intermediary organisation Mon, 18 Jun 2018 10:28:10 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.5 Xchanging Market Communication – 2018/071 IMR Re-Platform – Premium, Policy & Claims Processing Impact https://www.biba.org.uk/regulation-updates/xchanging-market-communication-2018-071-imr-re-platform-premium-policy-claims-processing-impact/ Thu, 07 Jun 2018 15:46:21 +0000 https://www.biba.org.uk/?p=30026 The post Xchanging Market Communication – 2018/071 IMR Re-Platform – Premium, Policy & Claims Processing Impact appeared first on British Insurance Brokers' Association.

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Xchanging Market Communication – 2018/070 IMR Re-Platform – Go Live Tuesday 19 June 2018 – Confirmed https://www.biba.org.uk/regulation-updates/xchanging-market-communication-2018-070-imr-re-platform-go-live-tuesday-19-june-2018-confirmed/ Thu, 07 Jun 2018 15:43:03 +0000 https://www.biba.org.uk/?p=30018 The post Xchanging Market Communication – 2018/070 IMR Re-Platform – Go Live Tuesday 19 June 2018 – Confirmed appeared first on British Insurance Brokers' Association.

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FCA claims management sector https://www.biba.org.uk/regulation-updates/fca-claims-management-sector/ Tue, 05 Jun 2018 14:22:33 +0000 https://www.biba.org.uk/?p=29985 The Financial Conduct Authority (FCA) has published draft rules setting out how it plans to regulate claims management companies (CMCs) when it takes over responsibility

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The Financial Conduct Authority (FCA) has published draft rules setting out how it plans to regulate claims management companies (CMCs) when it takes over responsibility for their regulation on 1 April 2019.  Members may access Consultation Paper CP18/15 by clicking here.

The FCA is proposing to carry many of the Claims Management Regulator’s rules across, making amendments where appropriate.  The consultation paper details how the FCA is proposing to supplement those rules by applying new standards to CMCs in a number of areas, including:

  • A prudential requirement for firms to hold capital linked to the type of business they undertake and new requirements to protect any money CMCs hold on behalf of clients;
  • A requirement to record all calls with customers, and to keep recordings for a minimum of 12 months;
  • The need to provide a potential customer with a short summary document containing important information such as an illustration of fees charged and an overview of the services provided by the CMC before any contract is agreed;
  • CMCs will need to highlight free alternatives to using the CMC, such as ombudsmen schemes, in marketing material and pre-contract disclosures;
  • Requiring CMCs that buy ‘lead lists’ from third parties to carry out due diligence on the firms from which they obtain leads;
  • Application of the Senior Managers & Certification Regime (SM&CR) to CMCs (the FCA will consult on this later in the year).

The consultation paper also outlines the FCA’s proposed approach to authorising and the ongoing supervision of both existing and new CMCs.

HM Treasury has proposed that firms will need to register their intention to operate with a temporary permission and pay the relevant fee to the FCA before 1 April 2019.  Firms will then need to go through the FCA’s authorisation process.

New firms will need to decide whether to begin their authorisation process with the Claims Management Regulator or wait and submit an application to the FCA after April 2019.

The consultation closes on Friday 3 August 2018.  BIBA will be submitting an official response to the paper.  Members wishing their views to be considered as part of this process should send comments to David Sparkes at sparkesd@biba.org.uk by close of business on Friday 20 July.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

 

 

 

 

 

 

 

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FOS talks vulnerability, trust and loyalty in its annual review 2017/18 https://www.biba.org.uk/regulation-updates/fos-talks-vulnerability-trust-and-loyalty-in-its-annual-review-2017-18/ Thu, 31 May 2018 07:50:44 +0000 https://www.biba.org.uk/?p=29964 The Financial Ombudsman Service (FOS) has published its annual review of 2017/18, a year in which they had received 1,456,396 new enquiries from the general

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The Financial Ombudsman Service (FOS) has published its annual review of 2017/18, a year in which they had received 1,456,396 new enquiries from the general public, equivalent to nearly three enquiries every minute of every day in the year.

Payment protection insurance (PPI) again made up the lion’s share accounting for 55% of the 339,967 new complaints received during the year (up by 2% on 2016/17), with insurance related complaints (excluding PPI) representing 11% of the total (down from 12%).  Motor insurance remained the most complained about GI product accounting for 8% of new complaints, while buildings cover represented 3% of disputes, travel 2% and contents 1%.

The general uphold rate for GI complaints was 30% (down from 31% in 2016/17) compared to an overall uphold rate of 34%* down from 43% in 2016/17 (*the overall uphold rate does not include cases affected by Plevin).

Caroline Wayman, Chief Ombudsman and CEO of FOS, noted in her foreword to the annual review that it was now approaching 20 years since discussions got underway about setting up a single ombudsman for financial services.  The FOS looked very different now.  Ms Wayman said: “The complaints we’ve seen over the last year give an insight into how new technologies, together with economic and social trends, have changed the game in terms of how people live day-to-day – often in ways that no-one anticipated back at the turn of the millennium.”

Standing still was not an option for the FOS, which was why the ombudsman had been through its biggest transformation since it was set up, she added.  This would allow the FOS to respond to the complaints received today and be ready for the future too.

The Chief Ombudsman drew on the themes of vulnerability, trust and loyalty in her foreword.  She spoke of the challenges presented by vulnerability citing consumer credit by way of an example where complaints to the FOS had risen by 40% in 2017/18.  “Given the way vulnerability can interact with people’s financial circumstances, we think an understanding of these issues should carry the same weight as any other aspect of resolving complaints,” she added.

To this end, the FOS had taken steps this year to ensure that it was better at identifying and prioritising situations where the ombudsman could step in early. This meant FOS could help significant numbers of people in days and sometimes hours – rather than weeks or months down the line.

Echoing some of the messages that have been emerging from the Financial Conduct Authority of late, the Chief Ombudsman also spoke about trust and loyalty.  Ms Wayman noted that the FOS had received small but steady numbers of complaints about insurance premiums that had risen year-on-year (around 200 per month).  The increases had: “… finally reached levels that customers, or their relatives, believed were unacceptable.  In some of these cases, we agreed that people had paid the price of loyalty – and during the year, we had robust conversations with insurers about the unfairness we’d seen,” she added.

Members may access the annual review by clicking here.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

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FCA publishes final rules under the IDD https://www.biba.org.uk/regulation-updates/fca-publishes-final-rules-under-the-idd/ Tue, 29 May 2018 08:59:13 +0000 https://www.biba.org.uk/?p=29948 The legislation that has enabled the Financial Conduct Authority (FCA) to make its final rules with regards to the Insurance Distribution Directive (IDD), the Insurance

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The legislation that has enabled the Financial Conduct Authority (FCA) to make its final rules with regards to the Insurance Distribution Directive (IDD), the Insurance Distribution (Regulated Activities and Miscellaneous Amendments) Order 2018, became law this week.

Consequently the FCA was able to make its final IDD rules at its May Board meeting.  The FCA has published Handbook Notice 55 which describes the changes to its Handbook and other material which can be found here.  

The FCA has also brought all IDD material together into one location on its website for ease of usage, which can be found here.

BIBA members should be well underway with their preparations to implement the IDD given that the FCA produced near-final rules in PS18/1 in January 2018 and indicated then that there would no substantive policy changes to them.  Members will need to ensure that they are compliant with the new rules by 1 October 2018.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

 

 

 

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FCA carrying out user satisfaction survey of its online Handbook https://www.biba.org.uk/regulation-updates/fca-carrying-out-user-satisfaction-survey-of-its-online-handbook/ Thu, 24 May 2018 15:46:30 +0000 https://www.biba.org.uk/?p=29942 The Financial Conduct Authority (FCA) is conducting a short survey about user satisfaction with its Handbook website. BIBA members who want to have their say,

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The Financial Conduct Authority (FCA) is conducting a short survey about user satisfaction with its Handbook website. BIBA members who want to have their say, please take five minutes to share your views with the FCA. Members can access the survey by clicking here.

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Data Protection Act receives Royal Assent finally https://www.biba.org.uk/latest-news/data-protection-act-receives-royal-assent-finally/ Thu, 24 May 2018 13:22:53 +0000 https://www.biba.org.uk/?p=29929 The Data Protection Act 2018 (DPA) received Royal Assent on Thursday 23 May.  The Act updates data protection laws in the UK, supplementing the General

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The Data Protection Act 2018 (DPA) received Royal Assent on Thursday 23 May.  The Act updates data protection laws in the UK, supplementing the General Data Protection Regulation (GDPR) which comes into force on 25 May 2018, implementing the EU Law Enforcement Directive, as well as extending data protection laws to areas which are not covered by the GDPR eg the insurance sector lobbied for the introduction of the so-called new ‘insurance purposes’ ground for the processing of certain special categories of personal data where necessary in the ‘substantial public interest’.

Insurance market participants can rely on this new ground where the processing of certain special categories of personal data is (see Paragraph 20 of Schedule 1, Part 2 of the DPA):

(a) is necessary for an insurance purpose,

(b) is of personal data revealing racial or ethnic origin, religious or philosophical beliefs or trade union membership, genetic data or data concerning health, and

(c) is necessary for reasons of substantial public interest.

‘Insurance purpose’ means:

(a) Advising on, arranging, underwriting or administering an insurance contract,

(b) administering a claim under an insurance contract, or

(c) exercising a right, or complying with an obligation, arising in connection with an insurance contract, including a right or obligation arising under an enactment or rule of law.

It has been confirmed that insurance includes reinsurance business.

A similar condition has been introduced with regards to the processing of criminal convictions data, there is however, no requirement to demonstrate that processing is in the ‘substantial public interest’.

Data controllers relying on Schedule 1, Part 2 conditions will be required to have an appropriate internal policy document in place (See Schedule 1, Part 4) explaining their activities.  This documentation must:

1)  Explain the details of the relevant condition relied upon;

2)  Explain how the controller complies with the data protection principles set out in Article 5 of the GDPR;

3) Explain the controller’s policies for the retention and erasure of personal data processed under the relevant condition.

Members can find a copy of the Act by clicking here.

The industry’s Insurance Market Core Information Uses Notice will now be updated to take the contents of the Act into account.  The Notice can be accessed by clicking here.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

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Xchanging Market Communication – 2018/063 IMR Re-Platform – Proposed Go Live Tuesday 19 June 2018 https://www.biba.org.uk/regulation-updates/xchanging-market-communication-2018-063-imr-re-platform-proposed-go-live-tuesday-19-june-2018/ Tue, 22 May 2018 08:46:14 +0000 https://www.biba.org.uk/?p=29903 The post Xchanging Market Communication – 2018/063 IMR Re-Platform – Proposed Go Live Tuesday 19 June 2018 appeared first on British Insurance Brokers' Association.

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Alpha Insurance Bankruptcy: Update from the FSCS https://www.biba.org.uk/regulation-updates/alpha-insurance-bankruptcy-update-from-the-fscs/ Fri, 18 May 2018 13:58:59 +0000 https://www.biba.org.uk/?p=29895 Update for brokers (managing general agents) for Alpha Insurance, and claims handling firms who acted on behalf of Alpha Insurance or their Agents To help

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Update for brokers (managing general agents) for Alpha Insurance, and claims handling firms who acted on behalf of Alpha Insurance or their Agents

To help us prepare our response to the failure of Alpha Insurance we are asking managing general agents and claims handling firms to contact us at brokers.alpha@fscs.org.uk to discuss how we might work together to assist Alpha Insurance policyholders.

We are sorry but we can only respond to brokers who were managing general agents and claims handling firms via this address.

We are aware that Alpha Insurance appear to have provided a range of insurances to the UK retail and commercial market, such as professional indemnity, motor and gap insurance, and home insurance. We are investigating the status of that insurance and whether and to what extent Alpha Insurance policyholders are protected by the Danish Fund and/or FSCS. We will provide a further update shortly.

 

1. About FSCS

FSCS is the UK’s statutory compensation scheme for customers of authorised financial services firms. It was set up by Government in 2001 and is funded by the financial services industry. FSCS protects investment business, deposits, home finance (mortgage) advice, general insurance and insurance broking. FSCS can pay for financial loss if a firm is unable, or likely to be unable, to pay claims against it. The following limits apply: up to £50,000 in compensation per person per firm for investments and home finance (for claims against firms declared in default from 1 January 2010), for general insurance advice and arranging claims 90% of the claim is protected with no upper limit. Compulsory insurance is 100% (for business conducted on or after 14 January 2005). For more details visit our Insurance Limitspage.

FSCS is an independent body, set up under the Financial Services and Markets Act 2000 (FSMA), and does not charge individual consumers for using its services.

 

2. Declaring a firm in default

Before FSCS can pay compensation it must be satisfied that a firm does not have sufficient assets to meet claims. It describes this as being ‘in default’. The Scheme will declare a firm in default if:

• it has received at least one claim; and

• it is satisfied that the firm is unable (or likely to be unable) to pay claims against it.

FSCS is required to do this before it can pay compensation to eligible claimants.

Declaring a firm in default allows consumers who believe they may have lost money as a result of their dealings with that firm to apply to the Scheme.

 

3. Authorised firms

Dealing with a Financial Conduct Authority (FCA) or Prudential Regulation Authority (PRA) authorised firm gives consumers access to the Financial Ombudsman Service (FOS) and FSCS. Consumers can check that the firm they are dealing with is authorised by using the FCA’s Financial Services Register found here: http://www.fca.org.uk/firms/systems-reporting/register

 

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GDPR round up https://www.biba.org.uk/regulation-updates/gdpr-round-up/ Tue, 15 May 2018 12:00:41 +0000 https://www.biba.org.uk/?p=28110 General Data Protection Regulation round-up The countdown is now well underway for the General Data Protection Regulation (GDPR) which will apply in the UK from

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General Data Protection Regulation round-up

The countdown is now well underway for the General Data Protection Regulation (GDPR) which will apply in the UK from 25 May 2018.  The UK’s decision to leave the European Union will not affect the start date of the GDPR, so firms will need to ensure that they review and adapt their data protection policies to ensure that they are in compliance with the new requirements when they come into effect in 2018.

It is important that firms get this right as the maximum fine for breaking the rules relating to data protection jumps from the thousands to the millions of pounds!  The cost of falling foul of the rules is high with the data protection regulator able to impose fines of up to €20 million or 4% of global annual turnover on firms.  The damage to a firm’s reputation as a result of a rule contravention can also be significant.

This document aims to bring together information about the GDPR online in one place for BIBA members to access more readily.  The document will include links to relevant sections of the GDPR itself, to guidance from the ICO and to guidance produced by the EU’s Article 29 Working Party (WP29) as well as related reading material from consultants, lawyers and other market participants which we think will help BIBA members interpret what is expected of them under the GDPR and prepare for it.

The GDPR what does it aim to achieve?

The General Data Protection Regulation builds on previous legislation – in the UK, the Data Protection Act 1988 (DPA) – providing more protections for consumers, and more privacy considerations for organisations.  It brings a more 21st century approach to the processing of personal data, recognising the development of increasingly sophisticated technology and the many different ways in which personal data is being collected and processed now (such as big data and data profiling), which were not even contemplated when the old legislation was drafted.  It puts an onus on businesses to change their entire ethos towards data protection.

What data is affected?

GDPR applies to ‘personal data’ which is any information relating to an identified or identifiable natural person.  An identifiable person is one who can be identified directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that person.

The GDPR’s definition is more detailed than the existing Data Protection Act (DPA) and makes it clear that information such as an online identifier – eg an IP address – can be personal data.  The more expansive GDPR definition also provides for a wide range of personal identifiers to represent personal data, eg cookies, reflecting changes in technology and the way organisations collect information about people.  So a work email address constitutes personal data, as it identifies a specific individual.

For most organisations, keeping HR records, customer lists, or contact details etc, the change to the definition should make little practical difference in terms of that data falling within the classification of personal data.  You can assume that if you hold information that falls within the scope of the current DPA, it will also fall within the scope of the GDPR.

The GDPR applies to both automated personal data and to manual filing systems where personal data are accessible according to specific criteria.  This is wider than the DPA’s definition and could include chronologically ordered sets of manual records containing personal data.

Personal data that has been pseudonymised – eg key-coded – can fall within the scope of the GDPR depending on how difficult it is to attribute the pseudonym to a particular individual.

The GDPR also refers to special categories of personal data (still commonly referred to as ‘sensitive personal data’, see Article 9 of the GDPR). This is personal data that is afforded extra protection under the GDPR, and is defined as data relating to:

  • racial or ethnic origin
  • political opinions
  • religious or philosophical beliefs
  • trade-union membership
  • health or sex life

Data relating to criminal offences is also given special protection (see Article 10 of the GDPR).

The General Data Protection Regulation

The GDPR also goes under the formal title of Regulation (EU) 2016/679 of the European Parliament and of the Council on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation).  Members can click here to find the source text of the GDPR.

European Commission

The European Commission has produced a helpful infographic, which highlights some of the key areas that BIBA members will need to review:

This would be a useful link to circulate to staff who may well be aware that changes are afoot with the data protection rules but are not involved directly with having to implement those changes across the business.  It would provide a basic introduction for all and provide an initial first step towards learning more about the GDPR.

Who are the Article 29 Data Protection Working Party?

One of the organisations you may hear mention of in the context of the GDPR is the Article 29 Data Protection Working Party or WP29.  The WP29 is an independent European working party that deals with issues relating to the protection of privacy and personal data.

The WP29 comprises representatives of the EU’s national supervisory authorities, the European Data Protection Supervisor and the European Commission.  The UK’s Information Commissioner’s Office is a member of the working party along with the data protection authorities of the 27 other EU member states.  The WP29 will transform into the European Data Protection Board in 2018.

The working party provides advice to the European Commission about data protection and privacy issues and publishes guidelines to assist individuals and companies interpret and implement particular elements of the GDPR.  It issues those guidelines in draft form for consultation with interested parties before adopting them.  Adopted guidelines from the working party relate to:

The WP29 also worked on the EU-US Privacy shield which is a key mechanism for the transfer of data from the European Union to the United States of America.  The group has adopted specific communication tools for individuals and companies regarding the privacy shield and these tools will be published on the working party’s website in the near future.

The WP29’s website can be found here >

What is the Information Commissioner’s Office (ICO)?

The Information Commissioner’s Office (ICO) is the national supervisory authority created to uphold information rights in the public interest in the UK. The ICO is a non-departmental public body which reports directly to Parliament and is sponsored by the Department for Culture, Media and Sport (DCMS) within Government.

The ICO will be responsible for enforcing the requirements of the GDPR, as it currently does for the DPA.

The ICO has already published a wealth of information on GDPR designed to help business prepare for the new legislation, which we would urge all BIBA members to review if they have not already done so. Here you can bookmark the ICO’s data reform protection website

The ICO has published an overview of the GDPR.  The overview highlights the key themes of the new legislation, pointing to the similarities with the DPA, and explaining some of the new and different requirements.

The ICO’s website has a twelve step plan on it designed to assist organisations prepare for the GDPR.  It sets out advice around making sure key decision makers know the law around personal information is undergoing change, documenting the information a business holds, and reviewing privacy notices.  This again is a worthwhile read especially for those businesses which are not far along the path towards GDPR compliance: click here >

GDPR readiness assessment tool

The ICO has developed a self-assessment tool for firms to determine their state of readiness for GDPR which can be found by clicking here.

Consent

A particularly noteworthy document is the ICO’s draft guidance paper on consent.  The guidance paper explains that GDPR sets a high standard for consent.  Consent means offering people genuine choice and control over how a business uses an individual’s data.

This guidance is designed to help businesses decide when to rely on consent for processing and when to look at alternatives.  It explains what counts as valid consent, and how to obtain and manage consent in a way that is GDPR compliant.

The ICO published the final version of is consent guidance in May 2018.  Members may click here to access it. 

This follows WP29 publishing its final consent guidelines in April 2018, the contents of which the ICO took into account when producing its final guidelines.  Click here for the WP29 guidelines on consent.

Does my firm need a data protection officer (DPO)?

This is not always obligatory.  It depends on the type and amount of data your firm collects, whether processing is its main business and if it is carried out on a large scale.  It is worthwhile taking a look at section 4, Articles 37 to 39 of the GDPR, which cover whether a business needs a DPO, their position and the tasks that they will be undertaking.

The WP29 has adopted guidelines on this subject.

The GDPR does allow for a group of undertakings to appoint a single data protection officer provided that a data protection officer is easily accessible from each establishment.

The Data Protection Bill

The Data Protection Bill (DPB) or HL Bill 66 was introduced in the House of Lords in September 2017 and is currently going through the Parliamentary process.  The Bill aims to overhaul the UK’s data protection laws and update them for the digital age.  It adds clarity about how the UK will apply statutory controls to areas of the GDPR where Member States have been given some flexibility ie the derogations.  For example, the UK insurance industry has made a request for a derogation from the GDPR by seeking a new legal ground for processing special category (sensitive) personal data.  The DPB does not bring the GDPR into effect in UK law as the GDPR does that for itself.

The Bill also plans to repeal the Data Protection Act 1988 so that the UK does not have two sets of legislation on the same subject running simultaneously.  Thirdly, the Bill also ensures that GDPR provisions continue to apply in the UK post-Brexit even though the GDPR itself ceases to have a direct effect then, so that there is no gap in legislation.

A draft of the DPB can be found by clicking here.

Members can follow the progress that the Bill is making by clicking here.

Privacy notices

A London Market Working Group has been set up to address issues presented by the GDPR.  The initiative, co-ordinated by the Lloyd’s Market Association (LMA), includes BIBA, the ABI, BIPAR, Lloyd’s, IUA, LIIBA, and insurer and broker representatives. The group is working to produce guidance for the market on how its participants can comply with certain elements of the new requirements in an efficient and effective manner, in particular with regards to the creation of a privacy notice guide to help data subjects understand how various insurance market participants process their personal data in respect of core activities through the insurance lifecycle. Firms within the industry would be able to use the guide as a reference and adapt it to meet their own needs when collecting and processing data under the GDPR.  BIBA will share this with members as soon as a working draft has been made available by the group.

The working group has sought further clarity from the ICO about its guidance on how firms should obtain explicit consent from policyholders and beneficiaries of insurance cover for the processing of sensitive personal data.  This is a vital legal ground for the processing of such data under the GDPR.

The working group argues that there are many insurance products which rely on the provision of personal data for arranging and underwriting purposes and when claims arise.  When this involves for example health or travel cover, some of this data is inevitably sensitive (special category data).  If a policyholder wants insurance protection, then clearly this goes hand-in-hand with the provision of necessary data – and the same when they want a claim paid (ie consent is a pre-condition to the insurance).  This needs to be recognised by the ICO.

Unlike the healthcare sector, which has a specific ground under the GDPR for processing sensitive personal data, the insurance industry has no such ground.  Either the ICO’s guidance must clearly acknowledge and allow consent to go hand-in-hand with the provision of the service, or we need a dedicated legal ground for processing such data.

To this end, the working group has made a joint representation to the ICO and has also asked the DCMS to consider a new dedicated processing ground, which it has power to make.  The industry is still awaiting a response in this area.

The group is also lobbying to get changes made to the Data Protection Bill (see above).

Other reading

BIBA hosted a webinar with law firm DAC Beachcroft, members can click here to view it.

DAC Beachcroft guide to data protection

BIBA’s guide to data protection

Brexit and the GDPR, DAC Beachcroft

Updated 4 January 2018

Click here to view BIBA’s Compliance Rules Special Edition on GDPR

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GDPR and consent – final guidance from the ICO https://www.biba.org.uk/regulation-updates/gdpr-and-consent-final-guidance-from-the-ico/ Tue, 15 May 2018 09:12:20 +0000 https://www.biba.org.uk/?p=29841 The Information Commissioner’s Office has published its final detailed guidance on consent.  Members may access the document by clicking here.  This follows the guidance issued by

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The Information Commissioner’s Office has published its final detailed guidance on consent.  Members may access the document by clicking here.  This follows the guidance issued by the European Group of Data Protection Authorities, the Article 29 Working Party, in April.

Publication of the guidance coincides with a useful blog from the ICO about consent which dispels some of the myths associated with it.

 

In particular, the myth that firms need to automatically refresh all existing consents in preparation for the new law.   The blog notes that while the GDPR does sets the bar high for consent, it is important to check processes and records to be sure existing consents meet the GDPR standard.  If they do there is no need to obtain fresh consent.

Where a firm has an existing relationship with customers who have purchased goods or services from them it may not be necessary to obtain fresh consent.

The blog urges people to think about whether they actually need to refresh consent before they send that email and not to forget to put in place mechanisms for people to withdraw their consent easily.

If consent is the appropriate lawful basis then that energy and effort must be spent establishing informed, active, unambiguous consent, the ICO adds.

The page also contains earlier blogs about the GDPR which contain a wealth of useful information for members.  Members may want to bookmark the following link: https://iconewsblog.org.uk

GDPR e-learning package

Lloyd’s has published the first part of their GDPR e-learning package which BIBA members may find of useful.  The module is designed to help the market understand the regulation, the new and enhanced rights of data subjects and the key obligations of data controllers and processors.  This module is available for all firms to use and contains a test at the end.  Please find the link below:

https://www.lloyds.com/market-resources/professional-development/european-general-data-protection-regulations

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

 

 

 

 

 

 

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Important Member Update – Alpha Insurance A/S declared bankrupt https://www.biba.org.uk/latest-news/important-member-update-alpha-insurance-a-s-declared-bankrupt/ Wed, 09 May 2018 07:49:45 +0000 https://www.biba.org.uk/?p=29738 The Danish FSA has informed the Financial Conduct Authority that Alpha Insurance A/S has been declared bankrupt and that cover on existing policies is cancelled

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The Danish FSA has informed the Financial Conduct Authority that Alpha Insurance A/S has been declared bankrupt and that cover on existing policies is cancelled with immediate effect from 8 May 2018.

Members that are using an MGA that has taken capacity from Alpha should contact the MGA to find out about their arrangements for replacing the capacity provider and on the continuing validity of existing contracts.

Brokers that have placed business with Alpha directly will urgently need to seek suitable alternative cover, particularly for compulsory classes of business such as motor insurance, for affected clients.

The bankruptcy means that policyholders can no longer report their claims to Alpha Insurance A/S. Policyholders must report their claims to the Danish Guarantee Fund for non-life insurance undertakings, provided that the claim is covered by the Guarantee Fund. Otherwise, policyholders must report their claims to the bankrupt estate of Alpha Insurance A/S.

The Danish guarantee fund should accept claims under personal lines policies held with Alpha, four weeks after 8 May 2018.

More information (including a Q&A) can be found at: https://finanstilsynet.dk/en/Nyheder-og-Presse/Pressemeddelelser/2018/Alpha-insurance-080518

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Providers to contribute 25% of intermediaries’ compensation costs in FSCS funding reform https://www.biba.org.uk/regulation-updates/providers-to-contribute-25-of-intermediaries-compensation-costs-in-fscs-funding-reform/ Thu, 03 May 2018 14:30:07 +0000 https://www.biba.org.uk/?p=29718 The Financial Conduct Authority (FCA) is to press ahead with its plans to reform the funding of the Financial Services Compensation Scheme (FSCS) with the

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The Financial Conduct Authority (FCA) is to press ahead with its plans to reform the funding of the Financial Services Compensation Scheme (FSCS) with the publication of consultation paper CP18/11 which provides feedback from CP17/36, final rules and new proposals for consultation.  Members may access the document by clicking here.

This consultation paper follows CP17/36  which consulted on proposals for reforming FSCS funding.  The review sought to ensure the FSCS continued to provide the right protections, works effectively and is funded fairly.  Following the feedback received the FCA has now made final rules to take effect on 1 April 2019, as follows:

  • merging the life and pensions and investment intermediation funding classes;
  • requiring product providers to contribute around 25% of the compensation costs which fall to the intermediation classes; and
  • moving pure protection intermediation from the life and pensions funding class to the general insurance distribution class.

The FCA had also consulted on proposals in CP17/36 to increase the FSCS compensation limits for investment provision, investment intermediation, home finance intermediation claims and debt management claims from £50,000 to £85,000.  The majority of respondents had agreed in principle with these proposals.  The new £85,000 limit would therefore apply to all claims in relation to defaults on or after 1 April 2019.

Chapter 4 of CP18/11 asked for views on a new proposal that personal investment firms (PIFs) should have professional indemnity insurance policies that do not limit claims, where the policyholder or a third party is insolvent, or where a person other than the PIF (eg the FSCS) is entitled to make a claim. The changes are intended to ensure that more consumer claims are covered by insurance policies which should help to reduce the cost of the FSCS to other firms.  Comments about this question should be sent to the FCA by 1 August 2018.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

 

 

 

 

 

 

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Marketing – and the GDPR – is it the end of cold-calling as we know it? https://www.biba.org.uk/regulation-updates/marketing-and-the-gdpr-is-it-the-end-of-cold-calling-as-we-know-it/ Thu, 03 May 2018 08:15:59 +0000 https://www.biba.org.uk/?p=29713 One of the issues that all the messages coming out on the General Data Protection Regulation (GDPR) has created, is a misunderstanding about what piece

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One of the issues that all the messages coming out on the General Data Protection Regulation (GDPR) has created, is a misunderstanding about what piece of legislation covers what, in terms of data privacy.

If we look at the ‘soon-to-be-departed world’, we have:

  • The Data Protection Act 1998 – covering the collection, storage and use of personal data including special categories of data (as sensitive personal data will in future be called); and
  • The Privacy & Electronic Communications (EC Directive) Regulations 2003 (PECR) – which covers most forms of marketing to customers/prospects (excluding postal).

Come Friday 25 May 2018 there will be:

  • The General Data Protection Regulation (which by then should be ‘Brexit-proofed’ in the new Data Protection Act) – covering the collection, storage and use of personal data including special categories of data; and
  • The Privacy & Electronic Communications (EC Directive) Regulations 2003 – still.

So how a firm collects personal data and prepares for a marketing activity must comply with the GDPR, but the marketing itself must comply with PECR – as it must now.

The Information Commissioner’s Office (ICO) is responsible for regulating around a dozen pieces of legislation, of which PECR is one.   There is lots of guidance on PECR on the ICO’s website if a firm is planning to send marketing emails, texts, faxes (if still in use) or make marketing calls – which raises the matter of cold-calling.

PECR groups customers into two classifications: ‘individual subscribers’ and ‘corporate subscribers’. As sole traders across the UK and general partnerships in England, Wales and Northern Ireland have no legal personality of their own, they are classified as ‘individual subscribers’.

A firm wishing to make ‘cold calls’ must first check that the subscriber has not registered with the Telephone Preference Service (TPS) or Corporate Telephone Preference Service (CTPS) (and as sole traders or partnerships could be registered under either, both will need checking if marketing to these).  The ICO also expects firms to have a list of subscribers that have told the firm that they do not want to be cold called.  If the subscriber is not on the TPS and/or CTPS, plus they have not said ‘don’t market to me’, a firm can cold call them.

The Financial Guidance and Claims Bill (which is making its way through Parliament at the time of writing) is drafted to permit the Secretary of State to be able to ban cold calling in relation to pensions specifically and to keep under review whether a ban on cold calling for other financial products would be appropriate.

For completeness, there are different requirements for sending marketing emails or texts.  For ‘individual subscribers’ the firm must have first obtained the customer’s explicit consent (doing away with any need for an email/text preference service).  It is important to understand that if a firm buys a prospect list and the prospects have consented to receiving marketing generally – this is not good enough.  The consent must be that the individual firm may email them.   Consent is not required to email corporate subscribers (but the GDPR still applies).

There are a number of tools available to the ICO for taking action to change the behaviour of anyone who breaches PECR.  They include criminal prosecution, non-criminal enforcement and audit.  The Information Commissioner also has the power to serve a monetary penalty notice imposing a fine of up to £500,000.  These powers are not mutually exclusive. The ICO says that it will used them in combination where justified by the circumstances.

The Privacy & Electronic Communications (EC Directive) Regulations 2003 (PECR), as the name infers, is the UK’s implementation of the EU’s Privacy & Electronic Communications Directive (2002/58/EC) (PECD).   Just as the Data Protection Directive is being replaced by the GDPR, the plan is to replace the PECD with a (European) PECR.  Like the e-Privacy Directive currently complements the Data Protection Directive, the proposed e-Privacy Regulation will complement the GDPR. While the idea was to bring this in at the same time as the GDPR, it is alleged that differences of opinion between the EU Council and European Parliament about its content has resulted in it being left in limbo at the moment (with no date set for progressing it).

More information about the proposed contents of the e-Privacy Regulation can be found at:

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52017PC0010&from=EN

 

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Xchanging Market Communication – 2018/054 UK Insurance Premium Tax Rate Change – Xchanging Processing Arrangements for items Processed on or after 1 June 2018 https://www.biba.org.uk/regulation-updates/xchanging-market-communication-2018-054-uk-insurance-premium-tax-rate-change-xchanging-processing-arrangements-for-items-processed-on-or-after-1-june-2018/ Tue, 01 May 2018 12:55:59 +0000 https://www.biba.org.uk/?p=29684 The post Xchanging Market Communication – 2018/054 UK Insurance Premium Tax Rate Change – Xchanging Processing Arrangements for items Processed on or after 1 June 2018 appeared first on British Insurance Brokers' Association.

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HM Treasury sets out store for CMC regulation by FCA https://www.biba.org.uk/regulation-updates/hm-treasury-sets-out-store-for-cmc-regulation-by-fca/ Wed, 25 Apr 2018 11:05:35 +0000 https://www.biba.org.uk/?p=29622 HM Treasury is seeking comments on the draft secondary regulations that will enable the transfer of claims management regulation to the Financial Conduct Authority (FCA),

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HM Treasury is seeking comments on the draft secondary regulations that will enable the transfer of claims management regulation to the Financial Conduct Authority (FCA), with a focus on the scope of regulation and the FCA’s consultation requirements.

The regulations being consulted on will only form part of the final statutory instrument (SI).  The final SI will also include the temporary permissions regime, transitional provisions to put the framework for the transfer in place, as well as consequential provisions.

The consultation also seeks comments on the design of a temporary permissions regime to help firms adapt to the FCA regime.

Members may access the document by clicking here.

Draft statutory instrument (SI) can be accessed here.

Responses to the consultation questions are requested by 1 June 2018.   Responses can be sent by email to: CMC.Regulation@hmtreasury.gsi.gov.uk.

Alternatively, they can be posted to: Claims Management Regulation Consultation, Financial Services Group, 1 Red, HM Treasury, 1 Horse Guards Road, London
SW1A 2HQ.

Members who would like their views to be considered as part of BIBA’s formal response to the consultation paper should send their comments to David Sparkes at sparkesd@biba.org.uk by close of business on 21 May 2018.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

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IMR RE-PLATFORM – GO LIVE TUESDAY 8 MAY 2018 PDF https://www.biba.org.uk/regulation-updates/imr-re-platform-go-live-tuesday-8-may-2018-pdf/ Fri, 13 Apr 2018 12:27:24 +0000 https://www.biba.org.uk/?p=29546 The post IMR RE-PLATFORM – GO LIVE TUESDAY 8 MAY 2018 PDF appeared first on British Insurance Brokers' Association.

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FCA identifies priorities for the year ahead in its business plan for 2018/19 https://www.biba.org.uk/regulation-updates/fca-identifies-priorities-year-ahead-business-plan-2018-19/ Tue, 10 Apr 2018 08:36:00 +0000 https://www.biba.org.uk/?p=29503 The Financial Conduct Authority (FCA) has published its Business Plan 2018/19 in which the regulator sets out its key priorities for the year ahead.  The

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The Financial Conduct Authority (FCA) has published its Business Plan 2018/19 in which the regulator sets out its key priorities for the year ahead.  The FCA said that firms were being challenged by rapidly evolving user needs, as well as increased uncertainty in the economic and political outlook.

The priorities in this year’s Business Plan reflected the high level of resource that the FCA needed to dedicate to European Union withdrawal, given its impact both on its regulation and the firms regulated, Andrew Bailey, CEO of the FCA, noted in his introduction to the document.

Alongside this work, the FCA said that it will prioritise seven cross sector areas, based on assessments of where there is the greatest harm or potential for harm, and where intervention can have the greatest impact.  The priority areas are:

  • Firms’ culture and governance which should drive behaviours and produce outcomes likely to benefit consumers and markets.
  • High-cost credit, building on the significant impact already made in the market.
  • Tackling financial crime, including fraud, scams and anti-money laundering to make the UK financial services sector a hostile place for criminals and a safe place for consumers.
  • Data security, resilience and outsourcing since technology plays a pivotal role in delivering financial products and services.
  • Innovation, big data, technology and competition which are driving change in markets.
  • The treatment of existing customers to ensure that they do not get less attention or receive poorer outcomes than new customers.
  • Long-term savings, pensions and intergenerational differences which reflects the changing UK population and their financial needs.

Specific to the general insurance sector; key areas of activity for the year ahead would be:

  • Implementation of the Insurance Distribution Directive (IDD) which comes into force on 1 October 2018. The FCA said it would work with firms to ensure that they comply with its rules as set out in Policy Statement 18/1.
  • Publishing the interim findings from its Wholesale Insurance Brokers’ Market Study by the end of 2018. This report will set out the FCA’s analysis and preliminary conclusions, and any potential solutions to address identified concerns.
  • Conclusion of the first phase of diagnostic work on value in the distribution chain. This has looked at three insurance products – tradesman insurance, travel insurance and motor ancillary insurances, including Guaranteed Asset Protection (GAP) insurance. FCA will report its findings and set out any next steps in the second half of 2018.
  • It will evaluate the effectiveness of its 2015 rules on GAP insurance to assess if they are improving competition and increasing consumer understanding.
  • Publication of the FCA’s Feedback Statement from its Call for Input on Access to Travel Insurance in the Summer of 2018.  This looked at the challenges for firms and consumers in providing and accessing fairly-priced cover for people with pre-existing medical conditions.

Members may access the business plan by clicking here.

The FCA also published a Sector View specific to the general insurance and protection market which it identified as remaining relatively stable as it adapted and evolved in a low growth environment.  Household budgets under pressure, rapid technological change and strong competition in parts were all identified as key characteristics of the sector.

Members may access the Sector View by clicking here.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

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Firms still coming up short on renewals standards https://www.biba.org.uk/regulation-updates/firms-still-coming-short-renewals-standards/ Wed, 04 Apr 2018 11:55:58 +0000 https://www.biba.org.uk/?p=29461 The Financial Conduct Authority (FCA) has reiterated its warning that it will take action against general insurance firms which fail to properly implement rules aimed

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The Financial Conduct Authority (FCA) has reiterated its warning that it will take action against general insurance firms which fail to properly implement rules aimed at increasing transparency and encouraging consumers to shop around at renewal.

Jonathan Davidson, Executive Director of Supervision – Retail and Authorisations, FCA, said it was “simply unacceptable to see that some firms are still not being properly transparent with their customers” a year on from the introduction of the rules which included requirements to show the insurance premium a customer paid last year alongside their proposed renewal premium, and issuing a prominent, clear and straightforward message to encourage shopping around.

The FCA published a warning about firms’ failings in October 2017 after follow-up work on the rules introduced in April of that year found that a number were still falling short of the requirements. At the time, BIBA outlined in a regulatory update to members the four areas where the FCA was finding poor practice in firms, which are still proving troublesome.  These were:

  • failing to implement the new rules for all products and customers;
  • mis-stating the previous years’ premium;
  • leaving out the shopping around message or not presenting it in a way which draws the reader’s attention; and
  • firms failing to properly identify all customers who needed renewal information either because of system error or a mistaken interpretation of the type of customer that is captured by the FCA’s rules.

The reiteration comes as the RAC becomes the latest firm to be found wanting in this area.  The RAC has agreed to contact affected customers after the FCA found that the firm had been failing to display the prior and current year premiums, and shopping around message as key information in its breakdown policy renewal documentation.  It serves as a useful reminder that add-on sales are affected by the new rules too.

Mr Davidson added:  “We have already acted where we have seen particularly poor practice in firms and will continue to do so where we see firms not being transparent.  As we said in October, we expect other firms to take notice of these issues, to look at what they are doing and to make sure they are getting it right.”

Firms and their senior management are expected to take immediate action to ensure they are compliant, the FCA added.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

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FCA sets out its approaches to Enforcement and Supervision – while prompting further discussion around firms’ cultures https://www.biba.org.uk/regulation-updates/fca-sets-approaches-enforcement-supervision-prompting-discussion-around-firms-cultures/ Wed, 21 Mar 2018 16:00:06 +0000 https://www.biba.org.uk/?p=29385 The Financial Conduct Authority (FCA) has published two further documents in its Approach series which seek to explain in more detail how it regulates firms,

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The Financial Conduct Authority (FCA) has published two further documents in its Approach series which seek to explain in more detail how it regulates firms, and provide further transparency to its thought processes and decision-making.   A series of Approach documents were promised when the FCA published its Mission statement in 2016.

In Approach to Supervision the FCA pledges to be more forward-looking and pre-emptive in its supervision of firms.  Firms’ strategies and cultures had been identified as being the root cause of most major failings and FCA supervision would look to engage more proactively with firms.  The focus would be on business models and the drivers of behaviour in firms.  Supervision will prioritise its activities according to the greatest risk of harm.  The document also details the FCA’s intelligence-driven and data-led approach that enables the regulator to take prompt and incisive action once harm has been identified.

The Approach to Enforcement outlines how the FCA conducts investigations and its powers.  It also shows how enforcement sets out to achieve fair and just outcomes in response to misconduct and to ensure FCA rules and requirements are obeyed.  The FCA said the overriding principle in its approach to enforcement was ‘substantive justice’ – this would ensure that investigations were conducted in a consistent and open-minded way to get the right outcomes.

The FCA is seeking comment about both papers as to whether its respective approaches to supervision and enforcement are clear and whether there are other issues that may need further clarification by 21 June 2018.  Final approach documents will be published later in the Winter of 2018.

BIBA will be preparing an official response to both documents. Members who would like their comments on one or both of the papers to be considered as part of this process should send them to David Sparkes, sparkesd@biba.org.uk by Thursday 7 June.  Please identify in your response which paper your comments relate to.

Transforming culture

Earlier in the week, Andrew Bailey, CEO of the FCA, had spoken about the importance of firms’ cultures and what the regulator had been doing to embed this in the work of its supervisors.  Bailey was speaking at a transforming culture in financial services conference in London.  He said the Senior Managers Regime and measures to govern the payment of remuneration were important developments in creating incentives for good culture.  At the conference, Bailey launched Discussion Paper DP18/2 which is a collection of 28 essays about transforming culture in financial services from thought leading academics, industry leaders, international regulators and change practitioners.  The FCA said it was not looking to receive formal feedback on DP18/2, but that the paper was intended to provide a basis for stimulating further debate on transforming culture in the sector.  Members may access the document by clicking here.

Andrew Bailey’s speech can be found by clicking here.

BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk.

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