CBB Volume 3: Contents
BC-1 General Requirements
BC-1.1 General Rules
This Module aims to encourage high standards of business conduct, which are broadly applicable to all licensees, all types of direct insuranceG business (i.e. excluding reinsurance), and all types of customersG . However, it is recognized that some types of licensees or business (such as captive insurance or commercial insurance) may present lower regulatory risks in relation to business conduct. For these types of business, the CBB therefore accepts that less detailed arrangements are likely to be sufficient to implement the principles contained in this Module. The CBB will monitor the regulatory performance of the market, and may in due course allow for specific exemptions or relaxations for certain types of business or licensees (see also BC-1.1.11 and BC-1.1.12).Amended: January 2007
Where packaged investment products include insurance elements, this Module applies to the insurance elements.
It is recognised that investment products represent different features and risks that require separate regulatory treatment. Specific rules applying to business conduct in relation to investment products will be developed over time.Amended: January 2007
All licensees must comply with the Insurance Code of Practice for business conduct with customersG , which sets out the minimum standards of good practice for market conduct in relation to direct insuranceG activities.
The Code comprises a number of overarching principles and a number of principles-based requirements rules in relation to the conduct of direct insuranceG business with customersG . The structure of the Insurance Code of Practice for Business Conduct with customersG reflects the key stages and activities over the lifetime of the customerG relationship for insurance products and services (see Illustration 1).
Illustration 1: Structure of Insurance Code of Practice for Business ConductAmended: January 2007
Licensees must maintain compliance with the Code throughout the lifetime of their relationships with all of their customersG .
The Code focuses on desired outcomes, rather than prescribing in detail measures required to achieve those outcomes. Licensees therefore have the flexibility to design arrangements that implement the Code, in a way that suits the particular nature of their business.
Insurance licenseesG must take responsibility for compliance with the Code of all persons carrying out direct insuranceG activities on their behalf (including, but not limited to, appointed representativesG and insurance managersG ).Amended: October 2007
Licensees must put in place appropriate measures across all their business operations and distribution channels to ensure compliance with the Code. Licensees must maintain adequate records to demonstrate compliance with the Code.
The CBB will monitor compliance with the Code and standards of business conduct. If required, the CBB may develop more detailed rules and guidance to supplement the existing Code.Amended: January 2007
The CBB will apply these requirements in a way that allows them to be adapted to fit the circumstances of licensees' businesses, to be achieved through a pragmatic approach to supervision. However, in exceptional circumstances, it may be appropriate for the CBB to consider and grant waivers where strict compliance would be unduly burdensome or would not achieve the purpose for which the requirement was intended. Each application for waiver will be considered on its individual merits. The fact that a waiver has been granted to a particular licensee should not be regarded as an indication that similar waivers will be issued to any other licensee.Amended: January 2007