The Public Practice Regulations have been updated to reflect the requirements of the Insurance Distribution Directive. If a firm is a licensed firm or a firm authorised by the Financial Conduct Authority to conduct insurance distribution activities then the minimum limit of indemnity required for those activities must be equivalent to at least €1,250,000 for any one claim and €1,850,000 in total per annum.

We have previously written to DPB Firms highlighting the amendments to the DPB Handbook as a result of the transposition of the Insurance Distribution Directive. A detailed summary of those changes is provided on our website including the requirement to increase your Professional Indemnity Insurance as detailed below:   Previous requirement Amended requirement 2.07 m. i) have in place professional indemnity insurance equivalent to at least €1,120,200 for each claim and €1,680,300 per annum for all claims. i) have in place professional indemnity insurance equivalent to at least €1,250,000 for each claim and €1,850,000 per annum for all claims, and ii) where the firm undertakes insurance distribution activities outside of the United Kingdom, but within the EU, its professional indemnity insurance must meet the limits in i) above and also cover the whole of the territory of the EU.   This requirement does not apply where the only activity in relation to a contract of insurance that the licensed firm undertakes is an introduction of a client to a permitted third party; Amended DPB Handbook click here. For more information click here.

Firms authorised by the Institute under the Investment Intermediaries Act, 1995 have been advised previously of a significant change to the scope of investment business activities that may be carried on under the Institute’s Investment Business Regulations.  The EU (Insurance Distribution) Regulations 2018 take effect from 1 October 2018.  One consequence of this is to remove from the scope of the Investment Business Regulations the provision of advice on insurance or insurance based products (including insurance based pensions products).  Firms wishing to engage in this activity will require separate authorisation by the Central Bank, details of which were previously advised to firms and may be found here (included in May circular).  From 1 October, firms may not conduct such activity under their Institute investment business authorisation. Firms should also note that the activity of simply referring a client to a third party for advice on insurance products (where the firm has no further role or involvement) no longer requires any form of authorisation. The Institute can continue to authorise firms to conduct the remaining activities set out in the Investment Business Regulations.  Revised regulations reflecting these changes will be issued shortly.