The European Commission began a review in 2010 of the Insurance Mediation Directive (IMD) which came into force in January 2005. The review resulted in proposed revised directive known as the Insurance Distribution Directive (IDD). UK firms were originally required to comply with this by 23rd February 2018, but this date was put back to 1st October 2018 by the EU.
The key points which are more relevant to mortgage and insurance intermediaries have been summarised below.
read more...Regulator introduces new requirements for renewals invited from 1st April 2017
The FCA's new rules are designed to increase transparency and reduce consumer inertia in relation to insurance renewals. As such these only apply to retail customers (although firms may apply them to commercial clients too if they so wish) and for policies that have a term of 10 -12 months.
The rules will only apply to firms who invite renewal themselves rather than leaving this to the insurer or any other broker in the chain.
The following article relates to insurance sold to a 'commercial' client'. FCA regulation defines a commercial client as one purchasing insurance for the purposes of a trade or profession. This would include vehicle insurance where the purpose of the vehicle is predominately work related or insurance on a Buy To Let property (rather than a Consumer BTL).
The Insurance Act 2015 comes into force from 12th August 2016. Previously commercial customers had a 'duty to disclose' information. From 12th August this will be replaced with a 'duty of fair presentation' which will not only apply when taking out an insurance contract but also at renewal or if any mid term adjustments are made.
It has been published that mortgage fraud is on the increase, its unclear if the level of mortgage fraud has increased or if firms and lenders are getting better at identifying it? Either way it’s important that brokers do all they can to avoid getting involved in fraudulent applications. What are the requirements? What should you be doing? How can you identify mortgage fraud?
read more...The FCA have finalised new complaints handling rules, which take effect from the 30th June 2016. The new rules will give firms more time to resolve complaints in a non formal way but will also mean all complaints will have to be reported on Gabriel returns and a new written communication sent. We have summarised the changes below
read more... Are you giving suitable advice when recommending debt consolidation? We often see mortgage files with clear evidence that the customer is making a monthly payment saving and the relevant warnings have been given regarding unsecured to secured, total cost may be higher etc but this by itself is not sufficient.
It’s not long now until the Mortgage Credit Directive (MCD) comes in and we’ve heard a lot of conflicting messages regarding what to do about second charge mortgages (secured loans). Some of this conflicting information is from the second charge providers during BDM visits so we wanted to clarify what’s required.
read more...Many brokers use the FCA templates for disclosure, either the CIDD, IDD or both. The FCA are concerned that the templates create a risk that firms adopt a tick-box approach to disclosure rather than creating a more personal form of disclosure to help your target customers understand the service you provide and costs.
read more...From the 21st March 2016 BTL mortgages will be treated differently. The government has chosen to use an exemption in the MCD that means they do not have to apply the Directive’s requirements to buy-to-let mortgage activity. However in order to rely on this exemption, an appropriate framework for this type of activity has to be put in place.
read more...The Mortgage Credit Directive will be implemented by 21st March 2016. The Directive aims to create a union-wide mortgage credit market with a high level of consumer protection, and applies to secured credit (first and second charge loans) as well as to home loans.
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