ICOBS — Insurance: Conduct of Business Sourcebook

Category: Compliance & AML · Reviewed by Tim Roche, Director · PI & Commercial · Last reviewed June 2026

The FCA Handbook sourcebook governing how authorised firms must distribute non-investment insurance, from quotation through inception, renewal, mid-term adjustments and claims.

Definition

ICOBS sets the conduct standards for firms carrying on insurance distribution activities in relation to non-investment insurance contracts. That includes general insurance (motor, property, liability, travel, etc.) and pure protection (term life, critical illness, income protection). It applies to insurers, intermediaries and ancillary insurance intermediaries, with proportionate variation by customer type.

Legal / Regulatory basis

ICOBS sits within the FCA Handbook, made under FSMA sections 137A and 137R. It principally implements UK retained provisions of the Insurance Distribution Directive (Directive (EU) 2016/97) — known as IDD — supplemented by the FCA’s own product governance and Consumer Duty rules. The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 defines the underlying regulated activities (article 25 arranging, article 39A assisting in the administration and performance, article 53(1) advising).

How it works in practice

ICOBS is organised into eight live chapters. ICOBS 1 sets application. ICOBS 2 covers general matters including the eligible complainants concept and the duty to act honestly, fairly and professionally in the customer’s best interests. ICOBS 3 deals with distance communications. ICOBS 4 requires status disclosure and remuneration transparency. ICOBS 5 sets out demands and needs identification and (where given) advice on a personal recommendation basis. ICOBS 6 covers product information including the Insurance Product Information Document (IPID). ICOBS 6A covers product value and renewals (including the general insurance pricing remedies). ICOBS 7 covers cancellation rights. ICOBS 8 covers claims handling. ICOBS 9 (now empty / repealed) historically covered cross-border issues.

Common variations

For Lloyd’s market business, ICOBS interacts with the Lloyd’s byelaws and minimum standards. For commercial customers, several ICOBS rules are disapplied or relaxed where the customer is not a “consumer” — for example, the demands and needs requirement still applies but the IPID is not mandatory for large commercial risks. The Consumer Duty in PRIN 2A overlays ICOBS for retail customers.

Example

When Apex sells a residential landlord policy, ICOBS 5 requires the firm to capture demands and needs (number of properties, tenant types, occupancy, optional covers) before recommending a product; ICOBS 6 requires provision of the insurer’s IPID and policy wording before the contract incepts; ICOBS 4 requires disclosure of remuneration in good time; and ICOBS 8 governs the firm’s role in claims notification, handling and any third-party complaint handling.

Common variations

Pure protection sits in a hybrid space — ICOBS applies for conduct, but tax, trust and underwriting considerations bring in long-term insurance regulation under the PRA for the manufacturing insurer. Travel insurance signposting rules sit in ICOBS 5.

Example

A motor insurance renewal letter sent by an intermediary must comply with ICOBS 6A.5 (renewal disclosures, including previous premium where the policy has been renewed at least once before) and the general fair-treatment requirements of ICOBS 2 and PRIN 2A.

See also

• COBS — Conduct of Business Sourcebook
• Insurance Distribution Directive (IDD)
• ICOBS 2 — General matters and fair treatment
• ICOBS 4 — Information about the firm and provider
• ICOBS 5 — Identifying client needs and advising
• ICOBS 6 — Product information
• ICOBS 8 — Claims handling
• Product Oversight and Governance (POG)
• PRIN 2A — The Consumer Duty

References

FCA Handbook, Insurance: Conduct of Business Sourcebook (ICOBS). Financial Services and Markets Act 2000, sections 137A, 137R. Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, articles 25, 39A, 53(1). UK retained Insurance Distribution Directive (Directive (EU) 2016/97). FCA Policy Statement PS21/5 (General insurance pricing practices). FCA Policy Statement PS22/9 (Consumer Duty).

Last reviewed

By Matt Bartlett, Director, on 2026-06-11.

This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-11. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.