Guidance on Disclosure under the AIR Code (2021-11)

Summary

This guidance clarifies how the Guernsey Financial Services Commission expects licensees and Authorised Insurance Representatives (AIRs) to comply with the written disclosure requirements in the Insurance Intermediaries Rules 2021 and the Code of Conduct for Authorised Insurance Representatives, in situations where general insurance business is transacted quickly, such as by telephone.

• Underlying requirement: Rule 7.4.4 and Code paragraphs 3.2.2 and 3.2.3 require written disclosure of services, products, expertise, authorised classes of insurance, and any limitations before advice is given or a policy is arranged.
• Practical relaxation: Where it is not viable to give written disclosure before advising on or arranging a general insurance product (e.g. a telephone quotation for immediate cover), the Commission will permit the disclosure to be made as soon as reasonably practicable after advice is given or the policy incepts.
• No relaxation where practicable: Where written disclosure can reasonably be made before providing advisory services, including face to face and online channels, the licensee must still do so beforehand.
• Scope limitation: This flexibility applies only to general insurance products; licensees and AIRs (including those also authorised as Financial Advisers) dealing with long term products must comply with the Rules and Code exactly as written, with no relaxation of the prior written disclosure requirement.

The guidance does not remove the disclosure obligation itself, it only adjusts the timing for general insurance business where prior disclosure is not practicable.

Key obligations

• Licensees must disclose to clients in writing the services, products offered and their expertise before providing insurance intermediary services, per Rule 7.4.4, except where impracticable for general insurance as described.
• AIRs must disclose in writing the classes of insurance and products they are authorised to advise on, and any range, scope or limitations in product providers/products, before providing advisory services, per Code 3.2.2 and 3.2.3, except where impracticable for general insurance as described.
• Where written disclosure cannot practicably be given before advice or arrangement of a general insurance product, it must still be provided as soon as reasonably practicable afterwards.
• Where written disclosure can reasonably be made before providing advisory services (including face to face and online), the licensee must make it before providing those services.
• Licensees and AIRs dealing with long term insurance products must comply with the written disclosure requirements exactly as set out in the Rules and Code, without relying on the timing flexibility given for general insurance.

Applies to

insurance intermediaries, licensees under the Insurance Intermediaries Rules 2021, Authorised Insurance Representatives (AIRs), Financial Advisers authorised as AIRs