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  4. New Incidental Financial Business rules and guidance

New Incidental Financial Business rules and guidance

9th October 2018 | Professional support , Regulation , Law Society news

Legal services consumers are set to benefit from increased protections when buying insurance products.

New practice rules for Scottish solicitors on Incidental Financial Business were introduced by the Law Society of Scotland and came in to force, on 1 October 2018 following detailed discussions with the Financial Conduct Authority (FCA).

The amendments are required by the EU Insurance Distribution Directive (IDD), under which consumers buying insurance products will benefit from,

  • greater transparency in the price and costs of insurance products
  • a simple, standardised insurance product information document (IPID) providing clearer information on non-life insurance products, so that consumers can make more informed decisions
  • where insurance products are offered in a package with another product or service, consumers will have the choice to buy the main product or service without the insurance policy
  • rules on transparency and business conduct to help consumers avoid buying products that do not meet their needs

Philip Yelland, Executive Director of Regulation at the Law Society of Scotland, said: “As the regulatory body for Scottish solicitors, we are acutely aware of our responsibility to keep the consumer front of mind in everything we do.

“It is crucial that we maintain robust and relevant practice rules providing clarity for our members and the appropriate and necessary protections for solicitors’ clients.”

As a result of the rule changes, the IFB terms of business have been updated and Scottish solicitors will need to update their information letters and statements of demands and needs in relation to contracts of insurance - template documents are included in the guidance on our website.

We consulted widely on the proposed changes, seeking the views of our members, the Lord President's Office and the Financial Conduct Authority (FCA).

The changes which were endorsed by Scottish solicitors at the Law Society of Scotland’s Special General Meeting in January 2018.

C2: Incidental Financial Business

This rule 2 makes provision for the carrying on by practice units of incidental financial business.
Read more about C2: Incidental Financial Business

C2: Incidental Financial Business Generally

An individual solicitor or firm of solicitors can undertake certain regulated activities and thereby be exempt from the requirement to be authorised by the FSA if that solicitor/firm is licensed by the Society under Part XX of the Financial Services and Markets Act 2000.
Read more about C2: Incidental Financial Business Generally

C2: Incidental Financial Business Forms

There are two Incidental Financial Business Forms
Read more about C2: Incidental Financial Business Forms

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