Many small insurance brokers are still bemused by the reams of paper being generated by the FSA. The 300-plus page consultation documents is followed by the weighty final rules. Most would suggest that they have a business to run and wading through such paperwork really isn't a good use of their time.

But is it all that complicated? Could the answer be as simple as putting in place a sales process?

Most organisations in the 'selling game' use a sales process of evaluating the customer, presenting a range of options, filtering and closing the sale. So how many small intermediaries follow this process?

FSA rules now require anyone selling an insurance product to provide information at certain parts of the sale (this will differ depending on the medium used - face-to-face or telephone) so all that is required is for an intermediary to lay down a process for all staff to follow and then undertake regular checks (internal audits) to make sure the processes are being followed.

What should the intermediary do and when? The answers can be found in ICOB 4 Selling and advising and ICOB 5 Product disclosure sections of the Insurance conduct of business rules.

For a typical intermediary selling face-to-face to a retail customer, the sales process might look like this:

  • Meet the customer
  • Ascertain what his initial insurance needs might be
  • Provide him with a copy of your status disclosure document ICOB4.28R. (He may request oral disclosure and he may want immediate cover)
  • Ascertain and record details of the customer's demands and needs (ICOB4.3.2R)
  • Make a recommendation from the available market, taking into account level of cover, cost of the contract, relevance of any exclusions, excesses, limitations or conditions (ICOB 4.3.6R)
  • Provide a policy summary (ICOB 5.5.1)
  • Provide a statement of price (ICOB 5.5.14R) including, where applicable, any fees that may be charged (ICOB4.2.15R)
  • Give details as required by Directive ICOB5.5.16R
  • Complete the proposal documentation giving clear advice as to the duty of disclosure to the customer
  • Receive payment for the policy
  • Immediately after the conclusion of a contract the customer should be provided with:

  • Information about the claims handling process (ICOB 5.3.9R)
  • Information about cancellation rights (ICOB 5.3.12R)
  • If not already covered in the policy summary, information about any compensation scheme and the extent and level of cover and how information can be obtained (in accordance with 5.5.1R).
  • Simply making sure that all staff follow these steps and ensuring that at each stage a record is kept will help to ensure that each sale is made in a compliant manner.

  • Matt Dyer is managing director of The Insurance Training Consortium
  • Email: