COB 7.5.3 Guidance

1. An Insurance Intermediary should not represent itself as providing advice or information on the basis of a fair analysis of the market under COB Rule 7.5.3(1) unless it has considered a sufficiently broad range of Contracts of Insurance and based its decision on an adequate analysis of those contracts.
2. Insurance Brokers act for Clients who are Policyholders. In doing so, they may claim under COB Rule 7.5.3(3) that they act 'independently' for the Clients.
3. The DFSA expects an Insurance Broker which holds itself out to a Client as acting 'independently' for the Client to be able to demonstrate its independence to the DFSA. Factors that the DFSA would take into account when assessing if an Insurance Broker has acted independently include whether that broker:
(a) has assessed a sufficiently large number of insurance products available on the market, and those products are sufficiently diverse in terms of their types and the issuers, to be able to suit the Client's needs and objectives;
(b) is free to select insurance products from a sufficiently large number of insurers — for example, if a broker has close links with insurers, or exclusivity clauses in arrangements with insurers whose products they can select, the broker may not be able to claim it is independent; and
(c) has disclosed clearly to the Client all commissions and other economic benefits it or a Group member receives from insurers with whom it places insurance.
Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]
[Amended] DFSA RM182/2016 (Made 19th June 2016) [VER27/08-16]