Changes to the Exempt Regulated Activities (ERA) rules
Prepare now for changes effective 1 October 2018.
ACCA practices in the UK can carry out a limited range of regulated activities, known as exempt regulated activities, if they are registered through ACCA to carry out such activities and meet the eligibility criteria as specified in ACCA’s Designated Professional Body Regulations 2001.
What are the changes?
In 2016 the EU updated the regulatory framework for the sale of insurance by introducing the Insurance Distribution Directive (2016/97/EU) (IDD). This repeals and replaces the regulations relating to insurance mediation. The UK government has now implemented the Directive and its provisions will apply to accountancy firms from 1 October 2018. The main changes brought in by IDD which will affect members can be briefly summarised as:
Professional indemnity insurance (PII) levels have changed for firms carrying out IDD activities (formerly known as insurance mediation) such as fee protection. These new limits apply from 1 October 2018.
Where insurance contracts such as PII are involved, members need to provide a standardised insurance product information document (IPID), on paper or on another durable medium. This would normally be produced by the manufacturer of the contract of general insurance. Members need to be aware of the amount of information that needs to be sent to their clients and should ensure that the fee protection companies are properly preparing and supplying this.
Guidance for members
Following the issuing of the Insurance Distribution Directive, ACCA has revised its Rulebook relating to the Designated Professional Body Regulations. This will affect all ACCA firms which carry out exempt regulated activities (ERA).
We have also updated our guide to ERA – particularly which activities can/cannot be undertaken – in a question and answer format which is based on ACCA’s interpretation of the legislation and guidance issued by the FCA. Our guide covers the following areas:
registering with ACCA for ERA
long-term care insurance
insurance distribution activities (including fee protection)