global insurance management

FCA Changes: Downline Agreements


Feb 25 2013

Changes needed to ‘downline’ agreements

Relevance:                   All firms with Agents, Introducer or Appointed Representatives.

Action required:           You need to write to them to confirm that their agreements will be amended to refer to the FCA, rather than he FSA, from 01.04.13

With the FSA becoming the FCA in April, we assume that insurers will issue new agreements to you at some stage.

Many may choose our suggested route of amending the agreement now and going for a redraft once any changes needed to meet new client money rules (due 30.06.13) are known.

To tidy up the position, prior to 1st April, you should write to any Agents, Introducers, and Appointed Representatives etc. to confirm the change to FCA. If you wish to seek legal advice on this issue then you should do so quickly. We would suggest something along the following lines will suffice:

‘Dear XXXXX,

Re: Our Agreement or Agency Agreement or Terms of Business

You will be aware that there are some changes happening later this year as to how the financial services industry is regulated.  On the 01 April 2013, the Financial Services Authority (FSA) will change its name to the Financial Conduct Authority (FCA).

This means that all relevant stationery, documents and contracts will need to be amended to reflect the new name. 

We conduct business with you under the terms of a signed agreement.  Because we believe that there may be a need to redraft the agreement later in 2013 (due to revised rules covering client money issues) we intend to leave this agreement in place.

However, we are writing to confirm that, from 01 April 2013, the agreement is amended so that any reference to the ‘Financial Services Authority (FSA)’ is amended to the ‘Financial Conduct Authority (FCA)’.

We will issue a revised agreement to you once we have been advised of the new Client Money arrangements and this will include the change of regulator. 

I am sure you will support our approach to this situation but I am happy to discuss any issue with you.

Yours etc.’

We would suggest that you should be writing in March to confirm the change. If you would like us to look at any agreements individually then please send them to us for review. Otherwise, we will leave you to send out the letters or emails.

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