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IPID insurance updates - January 2018

12 January 2018

The FCA has recently published a policy statement (PS17/27) entitled ‘Insurance Distribution Directive implementation – Feedback to CP17/23 and near-final rules’. The Policy Statement has been published following assorted queries and concerns raised by various market participants in relation to the implementation of the Insurance Distribution Directive (IDD). The policy statement appends draft updated ICOBS (Insurance Conduct of Business Sourcebook) rules, which provides clarity on how ICOBS is likely to be updated to take account of the IDD. It also provides some welcome clarification as to how consumers and commercial customers will be impacted by the IDD.

This note concentrates specifically on the requirements relating to product information and, more specifically, the obligation to provide an IPID (or not, as the case may be). This note is based on FCA Policy Statement 17/27 and does not necessarily represent the final rules, which are still subject to change or confirmation.


The proposed changes to ICOBS introduce the term ‘IPID Information’. IPID Information is essentially the information that must be included in an IPID, i.e. as detailed in Article 20(8) IDD.

The newly amended rules draw a distinction between the requirements relating commercial customers and consumers. By way of reminder:

  1. a ‘Consumer’ is – in brief terms – a natural person who enters into a policy for purposes outside of his or her trade, business or profession; and
  2. a ‘Commercial Customer’ is any customer who is not a Consumer (i.e. anyone else).


The proposed new ICOBS 6.1.10A makes it clear that Consumers must be provided with an IPID in the standard format, which must contain the IPID Information. 

Commercial customers

The proposed new ICOBS 6.1.7AG states that Commercial Customers must be provided with the IPID Information, although the information does not necessarily need to be provided in the form of the prescribed IPID template. The proposed new provisions state that the IPID Information can be given in the form of either or both of:

  1. an IPID
  2. a policy summary or similar document.

When deciding which format to use, the insurer and distributer must ensure the Customer is provided with appropriate information (ICOBS 6.1.5R), taking a number of factors into account (but it must in all cases include the IPID Information).

Insurers may decide that the IPID format is useful and appropriate for certain commercial risks, particularly in the SME sector. However, the proposed new ICOBS provisions allow flexibility for insurers and distributors to decide whether the IPID is the most suitable format for providing the information.

Personalisation of the document

One of the most lively areas of debate in relation to the introduction of IPIDs has centred on the extent to which the IPID must be personalised to the particular policyholder. Many organisations have fed back to the FCA to highlight the technical challenges presented by any requirement to personalise the IPID, rather than it being a static document.

The drafting of the IDD itself does suggest that the document must be personalised, at least insofar as it relates to the policy period and the geographical limits, although it does not explicitly say so.  The FCA’s Policy Statement now clarifies that, "…providing personalised information in a generic way, for example by cross referring to another document is consistent with the purpose of the IPID’.  The Policy Statement goes on to include an example sentence in which the IPID refers to ‘the agreed sum insured…specified on your policy schedule".

This clarification from the FCA is likely to provide some comfort to those organisations that were concerned about the technical challenges of creating dynamic IPIDs.

Implementation date

There has been much talk of a potential delay to the implementation date of the IDD until October 2018, or even March 2019. Although a delay may still occur, the policy statement confirms that the FCA cannot unilaterally delay the implementation date, and that it is still working to the original implementation date of 23 February 2018. Unless and until the implementation date is formally extended, we advise all market participants to be prepared for its implementation as planned next month.

Here at Browne Jacobson we are working closely with insurers and intermediaries on determining their obligations, producing IPIDs and recording the rationale for their contents. In most cases, we are able to provide our advice and draft IPIDs on a fixed fee basis. Click here for more details about our IPID drafting service.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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