Addendum to the Consumer Protection Code 2012 – September 2019’ (CPC)

Dear Member

As previously advised, the ‘Addendum to the Consumer Protection Code 2012 – September 2019’ (CPC) was published in two parts,  the second part focused on  the amendments arising from the Insurance Distribution Regulations 2018 (IDR).

The purpose of this email is to reiterate to members the changes contained in Part II of the addendum which came into effect on the 23^rd of September.

The addendum states that provisions 3.28, 3.29, 3.31, 3.33, 3.34 and 3.35 of the CPC no longer apply when distributing insurance-based investment products (IBIPS).

These provisions cover conflicts of interest requirements, such as:

• having an appropriate policy in place to identify and manage conflicts,
• disclosure requirements to the client of a conflict of interest that cannot be avoided,
• requirements that commission arrangements with product producers cannot impair the intermediary’s duty to act in the best interests of the consumer, and
• that remuneration arrangements with employees are not structured to potentially impair the firm’s obligations to act in the best interest of the consumer.

Provision 4.54 (breakdown of charges to be provided to the consumer) will not apply to the distribution of insurance-based investment products (IBIPs).

Also,  in relation to the provision of advice on IBIPs, the whole of Chapter 5 (Knowing the Consumer and Suitability requirements) does not apply.

In addition, provisions 3.17, 3.19, 3.32, 3.52, 3.53, 3.54 and 3.55 of the CPC will no longer apply to insurance distributors ( meaning any insurance intermediary, ancillary insurance intermediary or insurance undertaking).  These provisions deal with contingency sales, bundling, remunerations arrangements, obligations on product producers in respect of new investment products.

Provision 4.21 will also not apply to insurance distributors either, which deals with the provision of certain information to the consumer prior to the conclusion of a contract.

HOWEVER, although the above listed provisions of the CPC no longer apply, requirements of the IDR (Statutory Instrument 229 of 2018) which are equivalent to the CPC provision applies.  

For your ease of reference, Brokers Ireland has drafted a comparison of the above listed CPC provisions against the corresponding Insurance Distribution Regulations that continue to apply which is available along with a guidance document in the members compliance section of the Brokers Ireland website in the following folder: Central Bank of Ireland/Summary documents of Codes/Requirements.

We have also updated the Brokers Ireland compliance manual to reflect these changes:

• Page 10  – Analysis of the Market and use of the term “Independent”
• Pages 81 & 83 – insurance-based investment products (IBIPs)
• Page 99 – Conflicts of Interest
• Page 106 – Bundling & Contingent Selling
• Page 112 – Limited Analysis
• Page 116 – IBIPs
• Page 117/118 – Insurance policies
• Page 201/202 – Conflicts of Interest policy
• Page 218 – Product Producer Responsibilities

For ease of reference, the newly inserted sections are highlighted in red.