The Insurance Brokers Registration Council (Code of Conduct) Approval Order 1994

Made: 1st October 1994

Laid before Parliament: 6th October 1994

Coming into force: 21st November 1994

The Secretary of State, in exercise of the powers conferred by sections 27(1) and 28(1) of the Insurance Brokers (Registration) Act 1977[^f00001]and of all other powers enabling him in that behalf, hereby makes the following Order:—

1

This Order may be cited as the Insurance Brokers Registration Council (Code of Conduct) Approval Order 1994 and shall come into force on 21st November 1994.

2

The Code of Conduct drawn up by the Insurance Brokers Registration Council pursuant to section 10 of the Insurance Brokers (Registration) Act 1977 as set out in the Schedule to this Order is hereby approved.

3

The Insurance Brokers Registration Council (Code of Conduct) Approval Order 1978[^f00002]is hereby revoked.

SCHEDULE — CODE OF CONDUCT DRAWN UP BY THE INSURANCE BROKERS REGISTRATION COUNCIL PURSUANT TO SECTION 10 OF THE INSURANCE BROKERS (REGISTRATION) ACT 1977

Words and expressions used in this Code of Conduct shall have the meaning ascribed to them by the Insurance Brokers (Registration) Act 1977 (“the Act”) except that:

• “insurance broker” means practising insurance broker, registered insurance broker or enrolled body corporate;

• “insurance broking business” and references to businesses carried on by an insurance broker shall mean all aspects of the business conducted by a practising insurance broker or enrolled body corporate and includes, for example, investment business as defined by the Financial Services Act 1986, Schedule 1[^f00003];

• “insurer” means a person or body of persons carrying on insurance business;

• “advertisement” shall have the meaning ascribed to it by Section 207(2) of the Financial Services Act 1986 and “advertising” shall be construed accordingly;

• “appointed representative” shall have the meaning ascribed to it by Section 44 of the Financial Services Act 1986;

• “relevant investment business” shall have the meaning ascribed to it by the Insurance Brokers Registration Council (Conduct of Investment Business) Rules 1988[^f00004].

1

The Act provides for the registration of insurance brokers and for the regulation of their professional standards. The objective of the Code of Conduct is to establish a recognised standard of professional conduct to which all insurance brokers should, in the interests of the public and in the performance of their duties, conform and in doing so they should bear in mind this objective and the underlying spirit of this Code.

2

In the opinion of the Council, the fundamental principles governing the professional conduct of insurance brokers are shown below in paragraphs A to H. Any act or omission done or made by insurance brokers in breach of these fundamental principles may, in the opinion of the Council, constitute unprofessional conduct.

• (A) Insurance brokers shall at all times conduct business with utmost good faith and integrity.

• (B) Insurance brokers shall do everything possible to satisfy the requirements of clients and shall, subject to Principle C, place the interests of clients before all other considerations. Subject to these requirements and interests, insurance brokers shall have proper regard for others.

• (C) Insurance brokers shall not directly or indirectly do anything in the course of practising as insurance brokers which compromises or impairs, or is likely to compromise or impair, the good repute of insurance brokers or the insurance broking profession.

• (D) Statements made by or on behalf of insurance brokers when advertising shall not be misleading or extravagant.

• (E) Insurance brokers shall conduct their relationship with the Council, their professional body, with propriety.

• (F) Insurance brokers shall organise and control the internal affairs of their insurance broking business in a responsible manner, and where staff are employed ensure that they are competent, suitable, and under adequate day-to-day supervision by a registered insurance broker.

• (G) Insurance brokers should be familiar with, and in carrying on business should be mindful of guidance as to proper professional conduct contained in any Practice Notes issued or endorsed by the Council.

• (H) Insurance brokers who are authorised by the Council to conduct relevant investment business shall comply with any statements of principle issued under Section 47A of the Financial Services Act 1986.[^f00005]

Signed

Neil Hamilton — Parliamentary Under-Secretary of State, — 1st October 1994

Explanatory note

(This note is not part of the Order)

This Order approves the new Code of Conduct drawn up by the Insurance Brokers Registration Council for the purposes of the Insurance Brokers (Registration) Council Act 1977 and revokes the Insurance Brokers Registration Council (Code of Conduct) Approval Order 1978 No. 1394.

A Compliance Cost Assessment has been placed in the libraries of both Houses of Parliament. Copies are also available from DTI, Room 817, 10-18 Victoria Street, London SW1H 0NN.

Footnotes

[^f00001]: 1977 c. 46.

[^f00002]: S.I. 1978/1394.

[^f00004]: S.I. 1988/950.

[^f00005]: Section 47A was inserted by the Companies Act 1989, s.192.