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  • COB 7.8 COB 7.8 Suitability

    • COB 7.8.1

      An Insurer or an Insurance Intermediary must comply with the suitability requirement set out in COB section 3.4 when conducting any Insurance or Insurance Intermediation Business with or for a Retail Client in respect of Direct Long-Term Insurance.

      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

    • COB 7.8.2 COB 7.8.2

      (1) Subject to COB Rule 7.8.3, an Insurer or Insurance Intermediary must only make a recommendation to a Retail Client to enter into a Contract of Insurance that is General Insurance where it has taken reasonable steps to ensure that the recommended Contract of Insurance is suitable in light of the Client's demands and needs.
      (2) The Insurer or Insurance Intermediary must obtain from a Retail Client such information as is necessary to identify the Client's circumstances and objectives, and consider whether the terms of the particular contract of General Insurance meet the requirements identified.
      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

      • COB 7.8.2 Guidance

        Simple and easy to understand general insurance products, such as motor insurance, do not require a detailed suitability assessment. However, in other cases, the information which an Insurer or Insurance Intermediary would generally need to have about the Client’s needs and demands, before making a recommendation about a product, include:
        a. details relating to the purpose for which the Client is seeking to obtain insurance cover (e.g., what risks the Client wishes to cover);
        b. the Client’s circumstances, including financial, to assess the type of exclusions and level of excess the Client wishes to accept, or is suitable for the particular Client; and
        c. any other matters relevant to the particular type of insurance product or market.
        [Added] DFSA RMI259/2019 (Made 1st January 2020). [VER/34/01-20]

    • COB 7.8.3 COB 7.8.3

      An Insurer and an Insurance Intermediary may only recommend to a Client a contract of General Insurance that does not meet all the Client's requirements if it clearly explains to the Client, at the point of making the recommendation, that the contract does not fully meet the Client's requirements and the differences in the insurance recommended.

      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

      • COB 7.8.3 Guidance

        When deciding what level of explanation is appropriate for a Client to whom a contract of insurance that does not fully meet that Client's requirements is recommended, the Insurer or Insurance Intermediary should take into consideration the knowledge held by the Client in relation to the type of insurance in question. The explanation should include sufficient information so that the Client can understand easily the differences between what is recommended and the Client’s requirements, and the advantages and disadvantages of the recommended insurance, including any financial or other risks the Client may face if the recommended policy does not fully meet the Client’s requirements.

        Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]
        [Added] DFSA RMI259/2019 (Made 1st January 2020). [VER/34/01-20]

    • COB 7.8.4

      Where an Insurance Intermediary is instructed to obtain insurance which is contrary to the advice that it has given to a Client, the Insurance Intermediary must obtain from the Client written confirmation of the Client's instructions before arranging or buying the relevant insurance.

      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]