New Incidental Financial Business rules introduced by Law Society
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 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 the Law Society of Scotland website.
The Law Society consulted widely on the proposed changes, seeking the views of our members, the Lord President’s Office and the FCA.
The changes which were endorsed by Scottish solicitors at the Law Society of Scotland’s special general meeting in January 2018.