Compliance – December 2018
Wed Dec 12 2018
AML/CTF
The Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act has been signed into law by the President. This Act transposes the 4th Anti-Money Laundering Directive. The compliance unit is currently reviewing the legislation, and guidance will be issued to the membership in due course.
Referrals
The activity of “referring” or “introducing” in respect of an insurance product is not contained within the IDD and therefore does not fall with the definition of regulated activities. This means, provision 3.25 of the Consumer Protection Code 2012 does not apply. The result of this is that a fee, commission, other reward or remuneration may be paid for referrals/introductions.
However, this refers to insurance products only and not investment or mortgage introductions or referrals, which continue to be subject to the requirements of the Code.
For example, accountants (whether certified persons or not) can refer customers to a broker for insurance products and the broker can pay them for such referrals.
Section 30 Receipts
Provision 55 of the Insurance Distribution Regulations 2018 (IDR) removes “insurance products” and other “insurance” references from the Investment Intermediaries Act 1995 (IIA). The effect of this is that ‘Section 30’ of the IIA does not apply to insurance products. Section 30 lays out the wording of the Receipt that you issue to your customers for insurance and investment products. From 01 October last, ‘Section 30’ no longer applies.
However, Chapter 3.5 of the Consumer Protection Code still applies. Basically, this means that the title of your receipt should be amended by removing “Section 30”. All other wording within the receipt should remain as is. Again, this is for insurance products only.
Definition of Large Risks (IPIDs)
At the recent General Insurance Conference and the Winter CPD Sessions, there was some confusion as to what constituted “Large Risks” as the Insurance Product Information Document (IPID) does not have to be to be issued to clients in respect of these risks.
Brokers Ireland advised that we would provide members with the definition as per Statutory Instrument 485 of 2015 along with Schedule 1 (which lists the classes of non-life insurance) . See attached links.
