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New rules from the FCA will change the way you sell Add-ons and Optional Additional Products (OAPs)

We wrote to you in March to advise that the Financial Conduct Authority (FCA) has introduced a new set of rules for selling add-ons and optional additional products (OAPs). The guidance they provided stated that customers cannot automatically be opted in to additional products.

Importantly, from the 1st October 2016, the FCA has stipulated that:

The annual price including IPT for each add-on must be quoted to the customer, so that they can make an informed decision as to whether to purchase the add-on or not. The customer must be provided with a balanced view of the key benefits and exclusions for add-ons and OAPs in a comprehensible form, prior to purchase, which includes at renewal.

What action is required from you?

If you sell either Home and Motor insurance or SME insurance, the action you need to take is outlined below.

If you have any questions about the new FCA rules or the instructions provided in the boxes below, please contact your local Account Executive.

Actions for Personal Lines Policies

With effect from 1st October 2016, when selling Personal Lines Policies please follow the below instructions:

  • Selling of all add-ons must be done in accordance with the FCA rules.

  • Changes are being made to software house documentation to include the add-on prices. You should highlight the annual cost of any add-ons at the point of sale.

  • Summary of covers are being updated to reflect the key benefits and key exclusions for each add-on or OAP. Once these are available, they should be sent to your customers at New Business, MTA and Renewal. At this point, the NTP created in April will no longer need to be sent. Instead, the key benefits and exclusions should be highlighted to customers.

  • You should inform customers that if optional covers are included at renewal, but are no longer required, these can be removed.


  1. How will I know when the software house changes have been made?

    It is likely that some changes will not occur until after September - the current NTP should continue to be used until changes have been confirmed.

  2. You have treated accidental damage cover as an OAP rather than an Add-on. Why is this?

    We have sought clarification from the FCA who has agreed our approach.

Actions for SME Policies

With effect from 1st October 2016 we have updated our ZTrade platform as follows:

  • Accidental Damage cover – default removed for Commercial and Residential Property Owners. For Shop, Pub and Restaurant, Hair and Beauty, Office and Surgery and Trades and Professions products, Accidental Damage cover is given as standard.

  • Frozen Food and Goods in Transit cover – now included as standard for Shop, Hair and Beauty and Pub and Restaurant products.

  • Public and Products Liability – now included as standard for Shop, Hair and Beauty, Pub and Restaurant, Office and Surgery and Trades and Professions products.

  • Contract Disputes and Debt Recovery and Lease Disputes (legal expenses cover extensions provided by DAS) – premium to add or remove cover will be clearly displayed to ensure that you obtain the appropriate level of cover for your customer at the best possible price.

We will continue to distribute the current Property Owners NTP for existing business until 1st April 2017, which includes an Optional Cover section stating that Accidental Damage is an optional cover and should any changes be required to this cover, customers should contact their broker.

For non ZTrade business, whilst no cover was sold on an opt-out basis on Shop and Office policies in the past, we are sending details of optional extras in an NTP to your customers.

You can find the NTP on Zurich for Brokers by clicking on the appropriate cover pages of each ZTrade product.

If you have any questions, please contact your local Account Executive.


  1. How will the changes impact any unbound quotes I have done in the last 30 days?

    The changes are effective from 30th September, so valid quotes created prior to this date will still be covered by the 30 days quote guarantee.

  2. How will the changes impact my existing policies?

    The changes will impact new quotes and new policies effective from 30th September. Existing policies and MTA's on existing business will not be impacted until renewal.

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