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HMRC internal manual

VAT Insurance

Services of an Insurance Intermediary: Introductory Services: Introducer Appointed Representatives (IARs)

Introducing insurance business is a regulated activity under the Insurance Mediation Directive (see VATINS5120).  Businesses wishing to sell or promote insurance, must be authorised by the Financial Conduct Authority (FCA) or enter into an arrangement which does not require them to be directly authorised.

There are two categories of non-directly authorised introducers; Appointed Representatives (ARs) who are authorised to provide advice on and arrange regulated insurance products and Introducer Appointed Representatives (IARs) who are more restricted in what they can do.

An IAR is only permitted to provide limited introductory services which include:

  • Holding a stock of an insurance company’s brochures/applications to keep on display at their own premises or to hand out to Prospects (i.e. potential insurance customers) or to provide to Prospects via its website.
  • Subject to obtaining Prospect’s agreement, provide brokers and/or insurers with details of the Prospect.
  • Alternatively, the Introducer can advise Prospects of broker or insurance company contact details.

An IAR cannot:

  • provide advice or assistance in the provision of Insurance covers provided via the broker;
  • become involved in the sale or administration of insurances or handling of client premiums or claims in respect of insurance products;
  • directly assist a Prospect in the completion of an Insurance application form;

These regulatory restrictions mean that an IAR may not meet the conditions for exemption as outlined in this guidance. However, as explained in VATINS5240, regulatory status is only an indicator so it will still be necessary to consider the activities of an IAR on a case by case basis (and in particular whether they are acting as an intermediary in the bringing together of parties to specific contracts of insurance) to determine whether or not exemption will apply. Where the supplier performs activities via on-line channels, the guidance at VATINS5315 should be applied.