11.1.1. General application

Subject to COB 11.1.2, an Insurance Intermediary licensed by the AFSA to provide Insurance Intermediation must comply with the Rules in this COB 11, in respect of both Contracts of Insurance and Takaful Contracts.

11.1.2. Professional Clients and Market Counterparties

An Insurance Intermediary providing Insurance Intermediation for a Market Counterparty is only required to comply with COB 8.5 and 11.3.1, 11.7.1, 11.7.2.

An Insurance Intermediary providing Insurance Intermediation for a Professional Client is required to comply with COB 8.5 and 11.2.1, 11.3., 11.4, 11.5.1, 11.5.3, 11.6.1, 11.7.

An Insurance Intermediary may propose both Contracts of Insurance and Takaful Contracts to its Clients, as long as they provide clear information to enable their Clients to make informed choices.

11.2.1. General disclosure obligation

Prior to providing Insurance Intermediation to a Client, an Insurance Intermediary must disclose to that Client:

• (a) its name and address;
• (b) its regulatory status;
• (c) the name and address of the insurer or insurers effecting the Contract of Insurance;
• (d) if it has a direct or indirect holding representing 10% or more of the voting rights or capital in an insurer; or
• (e) if an insurer, or its parent undertaking, has a direct or indirect holding representing 10% or more of the voting rights or capital in the Insurance Intermediary;
• (f) contact details for notifying a claim under the Contract of Insurance; and
• (g) details of its complaints-handling procedure.

11.2.2. Disclosure of basis of advice

An Insurance Intermediary must, before providing Insurance Intermediation to a Retail Client, disclose whether:

• (a) it gives advice on the basis of a fair analysis of the market;
• (b) it has a contractual agreement with a particular insurer or insurers to offer only their

Contracts of Insurance to Clients; or

• (c) even if there are no contractual agreements of the type referred to in (b), it does not give advice on the basis of a fair analysis of the market.

If (b) or (c) applies, the Insurance Intermediary must be prepared to provide a Retail Client on request with a list of insurers with whom it deals and may deal in relation to the relevant Contracts of Insurance.

11.3.1. Disclosure of costs

An Insurance Intermediary must provide details of the costs of each Contract of Insurance or Insurance Intermediation service offered to a Client.

11.3.2. Disclosure of new costs

An Insurance Intermediary must ensure that it does not impose any new costs, fees or charges without first disclosing the amount and the purpose of such costs, fees, or charges to the Client.

11.3.3. Disclosure of commissions and other benefits

An Insurance Intermediary must, at the request of any Client, disclose to that Client any commissions or other benefits that it receives in connection with its Insurance Intermediation for that Client.

11.5.1. Providing a statement of demands and needs

Prior to the conclusion of a Contract of Insurance, an Insurance Intermediary must provide the Client with a statement of the demands and the needs of that Client, which may be in summary form, as well as the underlying reasons for any advice given to the Client in relation to that Contract of Insurance.

Guidance: Nature of statement of demands and needs The statement should be provided in writing, but may be provided verbally where the Client requests it, or where immediate cover is necessary.

11.5.2. Ensuring suitability based on demands and needs

An Insurance Intermediary must only make a recommendation to a Retail Client to enter into a Contract of Insurance that is General Insurance where it has taken reasonable steps to ensure that the recommended Contract of Insurance is suitable in light of the Client's demands and needs.

11.5.3. Written confirmation of instructions

Where an Insurance Intermediary is instructed to obtain insurance, which is contrary to the advice that it has given to a Client, the Insurance Intermediary must obtain from the Client written confirmation of the Client's instructions before arranging or buying the relevant insurance.

11.6.1. Adequate information

An Insurance Intermediary must provide adequate information in good time and in a comprehensible form to enable a Client to make an informed decision about whether or not to enter a Contract of Insurance or a Takaful Contract proposed by the Insurance Intermediary.

11.6.2. Policy summary

An Insurance Intermediary must provide a Retail Client with a policy summary explaining the terms of the Contract of Insurance or the Takaful Contract:

1. (a) the name of the insurer;
2. (b) type of insurance and cover;
3. (c) significant features and benefits;
4. (d) significant or unusual exclusions or limitations;
5. (e) applicable period of cover;
6. (f) a statement, where relevant, that the consumer may need to review and update the cover periodically to ensure it remains adequate;
7. (g) the procedure for handling complaints; and
8. (h) contact details for notifying a claim

11.7.1. Quotations

When giving a quotation, an Insurance Intermediary must take due care to ensure the accuracy of the quotation and its ability to obtain the insurance at the quoted terms.

11.7.2. Confirmation of cover

Where a Client concludes a Contract of Insurance or a Takaful Contract, an Insurance Intermediary must, as soon as reasonably practicable, provide that Client with:

1. (a) written confirmation and details of the insurance, including any changes to an existing Contract of Insurance; and
2. (b) the full policy documentation.

11.7.3. Amendments

An Insurance Intermediary must:

• (a) respond promptly if a Client requests an amendment to its insurance policy;
• (b) provide the Client with details of any additional premium or charges that may need to be paid or which may be returned; and
• (c) provide the Client with written confirmation of any amendment and return any premium or charges due to the Client promptly.

11.7.4. Advance notification

If the insurance cover of a Client is due to expire or needs to be renewed, the Insurance Intermediary must give sufficient advance notification to the Client to allow that Client to consider whether it wishes to enter into a new policy or renew its existing policy.

11.7.5. Documentation on expiry or cancellation

When the insurance expires or is cancelled, an Insurance Intermediary must on request provide the Client with the documentation and information to which that Client is entitled.

11.7.6. Claims—general requirements

Where an Insurance Intermediary handles claims it must:

• (a) handle claims promptly and fairly;
• (b) provide its Client with reasonable guidance on making a claim, and update it on the progress of its claim;
• (c) not unreasonably reject a claim (including by terminating or avoiding a policy); and
• (d) settle claims promptly once settlement terms are agreed.

11.7.7. Claims handling—recordkeeping

(1) An Insurance Intermediary must make a record of the following information in relation to each claim made against a policy handled by it:

• (a) details of the claim;
• (b) the date the claim was settled or rejected;
• (c) details of settlement or rejection, including information relevant to the basis for the settlement or rejection.

(2) The Insurance Intermediary must keep the record for at least 3 years after the day the claim is settled or rejected.