Download a leaflet on the optional CODEplan
Dental accident, emergency and out of hours insurance


CODEplan is an appointed representatives of HFIS plc who is authorised and regulated by the Financial Services Authority

The Financial Services Authority view of the Regulatory Status of Dental Practitioners providing CODEPlan membership to patients that includes Dental Trauma Cover.

Introduction
Since 15 January 2005 the Financial Services Authority (FSA) has been responsible for regulating the UK general insurance and reinsurance market.

The Financial Services Authority is an independent, non-government body, set up by the Financial Services and Markets Act (FSMA) 2000 which gave the FSA the power to:

• Make rules and provide guidance for regulated firms
• Authorise businesses to permit them to trade within the financial services
industry
• Approve the appointment of certain key individuals in businesses
• Investigate and enforce its rules
• Take disciplinary action against firms or individuals who break its rules

Under section 23 of the FSMA 2000 a person commits a criminal offence if he carries on regulated activities in breach of the Act and is subject to a maximum of two years imprisonment and an unlimited fine.

Regulated Activities
These are defined as:

• Advising on or arranging the purchase of general insurance, reinsurance
and also pure protection policies - together these are known as Non- investment insurance contracts
• Dealing in non-investment insurance contracts on someone else's behalf
• Assisting in the administration and performance of a contract, particularly
in the event of a claim.

In order to be registered, firms must meet strict professional requirements in
relation to their competence (possessing appropriate knowledge and skill),
reputation, professional indemnity cover and financial capacity. For this reason, many non-insurance individuals and firms have chosen to end any involvement in regulated activities.

Exclusion: article 72C (Provision of information on an incidental basis)
The good new is, however, that the FSA has allowed an exclusion within the Regulated Activities Order for persons whose principal business is other than insurance mediation activities.
 
It is contained within the FSA Handbook under PERG 5.6.6 (Guidance) and in broad terms, article 72C of the Regulated Activities Order excludes from the activities of arranging and assisting in the administration and performance of a contract of insurance activities that:
(1)  consist of the provision of information to the policyholder or potential policyholder;
(2)  are carried on by a person carrying on any profession or business which does not otherwise consist of regulated activities; and
(3)  amount to the provision of information that may reasonably be regarded as being incidental to that profession or business.
PERG 5.6.7 (Guidance) goes on to state that in the FSA's view, 'incidental' in this context means that the activity must arise out of, be complementary to or otherwise be sufficiently closely connected with the profession or business. In other words, there must be an inherent link between the activity and the firm's main business. For example, introducing dental insurance may be incidental to a dentist's activities; introducing pet insurance would not be incidental to his activities. In addition, to be considered 'incidental', in the FSA's view, the activity must not amount to the carrying on of a business in its own right.

PERG 5.6.8 (Guidance) further explains that this exclusion applies to a person whose profession or business does not otherwise consist of regulated activities. In the FSA's view, the fact that a person may carry on regulated activities in the course of the carrying on of a profession or business does not, of itself, mean that the profession or business consists of regulated activities. This is provided that the main focus of the profession or business does not involve regulated activities and that the regulated activities that are carried on arise in a way that is incidental and complementary to the carrying on of the profession or business.

So, the exclusion may be of relevance to exempt professional firms. It might also, for example, be relied on by doctors, vets and dentists as well as many businesses in the non-financial sector, even if they have permission to carry on regulated activities or are appointed representatives. This is assuming that their activities for which they are seeking to use the exclusion in article 72C are limited to providing information in a way which is incidental to their main profession or business.

It is important to stress that the exclusion only extends to information given to the policyholder or potential policyholder and not to the insurance undertaking. An intermediary who forwards a proposal form to an insurance undertaking would not be able to take the benefit of the exclusion. Similarly, where a person does more than provide information (for example, by helping a potential policyholder fill in an application form), he cannot take the benefit of this exclusion.