Laws and Life Insurance

The following represents the legal aspects we think you will be most interested in, especially as it relates to the purchase of life insurance and related products through the Internet. The information is neither definitive nor exhaustive but simply an introduction.

If you require more information relating to the regulation of life insurance companies and insurance brokers, we suggest you visit the Financial Services Authority’s web site which is www.fsa.gov.uk

Laws and life insurance

In order to take out a life insurance policy from a UK based insurance company, you must reside in the UK. This is not stipulated in UK law, but UK laws and tax regulations make it impossible for a UK based insurance company to sell life insurance to anyone other than a UK resident.

There are no laws in the UK which stipulate that a person shall, or shall not, have life insurance. Life insurance is an entirely voluntary form of insurance.

You buy life insurance from a UK based insurance company. As such your insurance provider is subject to all UK Corporate Laws. There are also a number of Laws that apply solely to insurance companies. These regulate the value of the risks they take on in relation to their financial reserves. These laws are designed to ensure that if you make a claim, your insurance company will be in a position to meet your claim.

The Data Protection Act 1998 is concerned with way organisations store, safeguard and use the data they have collected about people. This is particularly important within the insurance and life insurance industry as the companies involved accumulate huge amounts of information about you - from your age and hobbies to the very sensitive area of medical information. One of the key provisions is that if a company wishes to pass your information to another company for marketing purposes, the company collecting the data must warn you and give you the opportunity of refusing your permission for your information to be used in this way.

All reputable web sites concerned with the gathering of information for life insurance will have a “Privacy Statement” which tells you how they handle your information and how they use it. We advise you to read the privacy statements of any web site that you intend to use. If you are not happy with the way they propose to use your data, do not use that site. To read our “Privacy Statement” please click here.

The central piece of legislation affecting the promotion of financial products is the Financial Services and Markets Act (2000). This Act is highly complex but it is primarily concerned with the protection of the consumer. Its provisions currently center on financial products and the provision of financial advice.

The Financial Services and Markets Act (2000) seeks to ensure that the people who provide investment advice are trustworthy and competent (which includes being well trained and supervised), and that their advice is fully justifiable. It also seeks to ensure that you are provided with full and accurate information about the products you have selected, or are being advised to buy, both before and after you have bought them.

The Act also closely regulates the organisations that sell investment products and their Financial Advisers. Everyone and every organisation that provides financial advice on investments must be registered with the Financial Services Authority.
The Act does differentiate between investments made as a result of a recommendation from a Financial Adviser and an investment which is purchased through a Financial Adviser but where the customer was wholly responsible for the selection of the investment (in which case the Financial adviser was simply processing the purchase of the investment on the clients’ behalf and provided no advice whatsoever). The latter situation is known as “execution only” business. Under these circumstances the Advisers’ responsibilities are restricted to the efficient processing of the purchase and the advisor bears no responsibility for the suitability of the product for the customers needs.

All customers buying through a Financial Adviser must at the outset, be informed in writing of the Advisers’ Terms of Business. These will include details of a complaints procedure which is laid down by the Financial Services Authority and is rigorously implemented and scrutinised by them. But in outline, if a customer has a complaint, then the complaint has to be explained in writing and sent to the Compliance Officer of the business which provided the advice. The organisation then has to investigate the complaint and provide a reasoned reply to the customer. If the Compliance Officer upholds the complaint and the customer has occasioned a financial loss as a result, then the organisation must agree a financial settlement. Ultimately, if the customer has suffered financial loss and cannot accept either the organisations conclusions or their proposed financial settlement, then the case can be submitted to the Financial Ombudsman. Their service if free to the customer and they are totally independent. Their findings are normally binding on both parties.

The other primary protection for the customer is the Financial Services Compensation Scheme. This provides the customer with a level of protection if a financial organisation becomes bankrupt or cannot properly meet its’ financial responsibilities to investors.

The Url for this website is owned by Alliance Internet Ltd. Alliance Internet is an IAR of Click Ltd please read the Disclosure Document for more details.

-- Please Note --
This website endeavours to provide general information in relation to various financial products. We hope you find this information useful. In no circumstances should the information we provide be construed as Quote Life Insurance providing you with specific advice in relation to your own circumstances, on the suitability for you personally, of any product or service referred to within this website.

The URL for this web site is owned by Ecommerce Technologies Ltd, Sucursal em Portugal. Andromeda Webs Ltd under agreement with Ecommerce Technologies Ltd, uses, runs, manages, operates, designs, and produces copy and displays information on this web site.
Andromeda Webs Ltd is an Introducer Appointed Representative of Moneyquest (UK) Ltd. Moneyquest (UK) Ltd is authorised and regulated by the Financial Services Authority for insurance mediation.