The new European Insurance Distribution Directive, replacing the Insurance Mediation Directive, comes into force on 1 October 2018. The directive will affect conveyancing firms which, for instance, arrange defective title insurance in a conveyance.
The directive means that firms carrying on insurance distribution activities will need to change the way they work. The new directive aims to strengthen protections in place for clients, such as improving the information they receive.
Firms working in personal injury, conveyancing or probate are most likely to be affected. For example, they might arrange after-the-event insurance in a personal injury matter or defective title insurance in a conveyance. There may be other insurance products that firms advise on or arrange for their clients in other areas of law.
The Solicitors Regulation Authority (SRA) proposed changes to the Handbook to cater for these new requirements, and it has now had its approach approved by the Financial Conduct Authority (FCA) and Legal Services Board (LSB).
All firms should therefore assess their own individual practices and make sure they are up to date and able to comply with the revised rules. The SRA will be writing to a number of firms that have indicated that they carry on insurance mediation activities in their response to last year’s Financial Services Activities questionnaire.