The Isle of Man Financial Services Authority has issued a notice to financial advisers and general insurance intermediaries reminding them of their regulatory obligations when selling long-term “pure protection” contracts, and pointing firms to existing guidance on terms of business agreements and the extent of advice required. The Authority emphasises that pure protection sales fall under the Insurance Act 2008 even where the activity is undertaken by a firm licensed as an independent financial adviser under the Financial Services Act 2008. Firms selling pure protection contracts must execute a terms of business agreement with customers meeting Insurance Act 2008 requirements, in addition to terms of business obligations for other regulated activities under the Financial Services Act 2008, and may use separate or combined documents provided both Acts’ requirements are met. Firms are expected to document how customers are made aware of the basis and type of advice given, including whether advice is full or limited or how customer demands and needs have been met, without needing separate meetings to do so. The notice also references consultation feedback that led the Authority to proceed with removing the previous exemption that allowed such IFAs to avoid registration under the Insurance Act 2008 framework.
Isle of Man Financial Services Authority 2025-11-04
Isle of Man Financial Services Authority reiterates terms of business and advice obligations for firms selling pure protection insurance
The Isle of Man Financial Services Authority reminded financial advisers and insurance intermediaries of their obligations under the Insurance Act 2008 when selling long-term "pure protection" contracts. Firms must comply with business agreements and document advice to customers. The Authority also noted the removal of a previous exemption allowing independent financial advisers to avoid registration under the Insurance Act 2008.