Supporting Your Business
FSA News Archive
Customer Categorisation - Complying with FSA Requirements
The FSA ICOB rules aim to ensure that both commercial and retail customers receive an appropriate level of information and documentation.
In order to guarantee that this happens we have clearly defined those Norwich Union products whose customers may require the retail customer protections and those which are purely commercial products and customers.
Norwich Union Product Set
These products have been identified because they are either directly aimed at individuals buying personal covers or they contain a significant element of "mixed use" cover.
"Mixed use" has been defined by the FSA as being cover that provides protection for an individual in both a business and non- business capacity.
Where a traditionally commercial policy (as defined above) gives a significant level of "mixed use" cover, we will provide sole traders and partnerships (other than Limited Liability Partnerships and partnerships in Scotland) buying the policy with the retail protections.
However where the product is solely a commercial policy aimed at commercial customers, we consider that it is not appropriate to define these products under the retail code.
Not only is this not required by the FSA but we believe it also adds no value for customers and may in fact mean excessive and unwanted information being introduced.
In order to explain our rationale behind this categorisation, please find below some further detail specifically surrounding the criteria used for categorising our commercial product set.
| Products Afforded Retail Protection | Rationale |
|---|---|
| Personal Insurances | Products for individuals in personal capacity. |
| Self-employed | Can be extended to include business equipment and possible overlap with home insurance. |
| Pub, Restaurant & Hotel | Pub and Hotel can be extended to include owners personal possessions as they could live on the premises |
| Care Homes for the Elderly | Can be extended to include owners personal possessions as they could live on the premises.. |
| Agriculture | Can include Farm Home and Farm motor. |
| Motor Trade | Social, Domestic and Pleasure use under the Road Risks section for (i) policyholder (ii) partner or director of the policyholder (iii) the spouse of the Policyholder or of any partner or director of the Policyholder (iv) any employee. |
|
Includes Social, Domestic and Pleasure purposes. |
| Legal Indemnity | Provides legal indemnities arising during the conveyancing process for both residential and commercial properties. Therefore can be either retail or commercial. |
| Products Afforded Commercial Protection | Rationale |
|---|---|
| Business package, no mixed use. | |
| Commercial Property Owners | Property used to derive rental income and classed as a commercial risk. Residents Associations are set up as a Limited company. |
| Business policy, no mixed use. | |
| Leisure & Wellbeing | Larger hotels, pubs and carehomes can be accommodated on this product however these are likely to be Ltd Companies and PLC's. |
| Employee Care & Assistance | There is no direct benefit afforded to individuals. Cover is for the benefit of the company. |
Additional documentation
Our aim is provide tailored and relevant information for our intermediaries and their clients and we believe that we can best achieve this by clearly classifying our products in this way.
We do, however, understand that in some cases you would find it helpful to have policy summaries for our commercial products to ensure the customer is given "sufficient information to make an informed decision".
In addition there can be doubt over whether the policyholder is commercial or retail and there might be some very minor element of mixed use included in the policy.
To address these concerns we have produced 12 new policy summaries available on e-broking though we will still be treating these as purely commercial products in all other respects.
