BC-1.1.1

This Module applies to the direct insurance activities of all licensees in relation to domestic business.

BC-1.1.2

This Module aims to encourage high standards of business conduct, which are broadly applicable to all licensees, all types of direct insurance business (i.e. excluding reinsurance), and all types of customers. 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).

BC-1.1.3

Where packaged investment products include insurance elements, this Module applies to the insurance elements.

BC-1.1.4

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.

BC-1.1.5

All licensees must comply with the Insurance Code of Practice for business conduct with customers, which sets out the minimum standards of good practice for market conduct in relation to direct insurance activities.

BC-1.1.6

The Code comprises a number of overarching principles and a number of principles-based requirements rules in relation to the conduct of direct insurance business with customers. The structure of the Insurance Code of Practice for Business Conduct with customers reflects the key stages and activities over the lifetime of the customer relationship for insurance products and services (see Illustration 1).

Illustration 1: Structure of Insurance Code of Practice for Business Conduct

BC-1.1.7

Licensees must maintain compliance with the Code throughout the lifetime of their relationships with all of their customers.

BC-1.1.8

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.

BC-1.1.9

Insurance licensees must take responsibility for compliance with the Code of all persons carrying out direct insurance activities on their behalf (including, but not limited to, appointed representatives and insurance managers).

BC-1.1.10

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.

BC-1.1.11

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.

BC-1.1.12

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.