Misrepresentation, Non-Disclosure and Breach ... - Law Commission

A.56 The FSA sets out its Rules for regulated firms in its Handbook. With effect from 1
December 2001 the FSA took responsibility for conduct of business regulation of
investment insurance. The relevant Rules are to be found in the Conduct of
Business ("COB") sourcebook.
A.57 On 13 July 2005, the FSA announced that it would be simplifying the COB regime
to make it “easier to understand, comply with, enforce and amend” 22 . It is
anticipated that a revised structure for the COB sourcebook will be introduced in
November 2007 at the same time as the Markets in Financial Instruments
Directive (“MiFID”) is implemented.
Financial Ombudsman Service
A.58 When this new system was being designed, it was decided that there should be a
single complaints-handling body — the Financial Ombudsman Service.
A.59 The Financial Ombudsman Service ("FOS") therefore replaced eight existing
dispute-resolution mechanisms, including the Insurance Ombudsman Bureau and
the Personal Investment Authority Ombudsman. It was established under Part 16
and Schedule 17 of FiSMA. In addition, Rules relating to the FOS can be found in
the Dispute Resolution: Complaints sourcebook (“DISP”) within the FSA
Handbook. Although the FOS has both a compulsory and a voluntary jurisdiction,
it is the former that is of primary importance for current purposes.
A.60 Provided that certain preliminary conditions are met, the FOS can consider
complaints against insurers and intermediaries. Both complainant and the
complaint must be within the scope of the scheme, and the complaint must be
brought within the relevant time limits and not subject to dismissal without
consideration of its merits. Complaints may be referred to the FOS by private
individuals, and by sole traders and small businesses with a turnover of less than
£1 million.
A.61 Chapter 1 of DISP contains rules relating to the internal handling of complaints by
firms:
The purpose of this chapter is to set out the rules relating to the
internal handling of complaints by firms, including the procedures
which a firm must put in place; the time limits within which a firm must
deal with a complaint; the referral of complaints, the records of a
complaint which a firm must make and retain; and the requirements
on a firm to report information about complaints to the FSA. This is to
ensure that complaints are handled fairly, effectively and promptly,
and resolved at the earliest possible opportunity, minimising the
number of unresolved complaints which need to be referred to the
Financial Ombudsman Service.
BRITISH INSURANCE LAW ASSOCIATION REPORT 2002
A.62 In 2002 the British Insurance Law Association ("BILA") submitted a report to the
English Law Commission in which it recommended reform of various aspects of
insurance contract law.
22 FSA/PN079/2005.
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