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We have provided you here with some information which represents the legal aspects we
think you will find most interesting. The information is not designed to be either definitive
or exhaustive, but as a simple introduction.
If you require more detailed information relating to the regulation of life insurance
companies or insurance brokers, visit the Financial Services Authority's web site at: www.fsa.gov.uk
UK Laws and life insurance
To take out a life insurance policy with a UK based insurance company, it is essential
that you are a UK resident. This is not a legal requirement, but is simply a reflection
of the laws and tax arrangements in the UK which make it impossible for a UK based insurance
company to offer insurance to anyone other than a UK resident.
All Insurance Companies in the UK are subject to UK Corporate Laws. There are special
regulations that only apply insurance companies however, and these control the value of
the risks the companies take on in relation to their financial reserves. These regulations
ensure that your insurance company will be in a position to pay out all their claims.
The Data Protection Act 1998 deals with the way all UK businesses store, safeguard and
use the data they obtain about people. This is particularly important within the life insurance
industry as the life insurance companies store significant amounts of sensitive information
about you - including your age, hobbies and health. If a business wishes to pass on your
information for marketing purposes, they must clearly advise you of this give you the opportunity
to refuse permission for your data be used in this way.
All reputable web sites selling life insurance will have a "Privacy Statement"- this will
explain how they handle your information and how it is used. You will find our Privacy Policy within our Terms of Business - the link to our
Terms of Business is on the left hand side of every page.
The Financial Services and Markets Act (2000) is the most important piece of legislation
affecting the promotion of financial services, and is primarily concerned with protecting
the customer. The workings of the Act are primarily overseen by the Financial Services
Authority (FSA), which now has responsibility for most financial services including, mortgages
and general insurance, including life insurance.
The FSA is there to ensure that the people who provide financial advice are trustworthy,
competent, well supervised and well trained - and that they give advice that is in the
client's best interests. The FSA also makes sure that you are given full and accurate information
about the products you are buying, both before and after purchase.
All customers buying through a Financial Adviser must be informed in writing at the outset
of the purchasing process under which the Adviser conducts
business. This information will be contained within their Terms of Business and Disclosure Documents. These documents will also include details of their complaints procedure. In short,
if a customer wishes to complain, then the customer must make a written complaint and send
it to the Compliance Officer of the business that provided the advice. That business will
then carry out an investigation and reply to the customer in writing. If the Compliance
Officer upholds the complaint, and the customer has suffered a financial loss as a result,
then the business will arrange a financial settlement with the customer. Ultimately, if
the customer has suffered financial loss and cannot accept either the organisations' conclusions
or their proposed financial settlement, then they can refer the complaint to the Financial
Ombudsman. The Financial Ombudsman's service is free to the customer and they are wholly
independent, once they have made their decision it will be binding on both parties.
The other central piece of protection for the customer is the Financial Services Compensation
Scheme. This provides the customer with a level of protection if a UK financial organisation
becomes bankrupt or cannot properly meet its' financial responsibilities to its clients.
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