LIIBA clarifies FCA’s territorial scope

London and International Insurance Brokers’ Association (LIIBA), the representative body for London market insurance brokers, has confirmed with its members that the Financial Conduct Authority’s (FCA) conduct rules do not apply to distribution services carried out outside the United Kingdom.

LIIBA shared an email from the FCA that provides written confirmation of the clarification. Christopher Croft, Chief Executive Officer, LIIBA, further explained that this is welcome news for the association and its members.

With this clarification, the association can now conclude a decade-long lobbying effort to persuade FCA of the need for this clarity.

This will considerably reduce the regulatory burden placed on LIIBA members when it deal with overseas clients.

Croft further concluded: “Until now, a LIIBA member receiving business from a producing broker overseas could not be certain that it would not be held accountable for the original recommendation made to the client. This would lead to a certain amount of ‘second guessing’ of the work that added unnecessary cost to the process.

“Now brokers can be confident that their sole responsibility is to carry out the instructions of their broker partner leading to a streamlined and efficient placing experience. This development is a positive sign of FCA responding to its new objective to facilitate international competitiveness and economic growth. FCA is to be congratulated for providing this clarity.”

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