Issuing a few key facts

August is referred to as the 'silly season' but do not get carried away. It is always a surprise when brokers get a piece of information, then take it to mean what they decided that it would mean. Please, read this carefully!

At the beginning of July 2007 the FSA issued a consultation paper CP07/16 that covered proposed changes to the ICOB rules. Read it in full at http://www.fsa.gov.uk/pages/Library/Policy/CP/2007/07_16.shtml.

However, it does propose that ICOB be replaced with NEWCOB and within the proposals are a number of issues of which brokers should be aware. Assuming that the proposals are adopted, they will come into force in January next year.

The highlights are: status and service information currently within the IDD will remain; policy summary or keyfacts document will no longer be required - except on PPI or pure protection contracts; demands and needs statements will still be required for all commercial and personal risks; 'retail' and 'commercial' classifications will disappear, to be replaced with a sole category of 'consumer'; and as a result, the 21 day rule for renewals will be withdrawn and replaced by a single 'in good time' requirement.

No doubt, in the coming weeks and months, guidance will be sought as to a definition of 'in good time' and firms that use a compliance consultant will be kept appraised of what is necessary in their own case.

I must stress that the above are proposals and the FSA have made it clear that failure to comply with the current rules can still lead to enforcement action.