Standards & Advice update: August 2021

In this month's Standards & Advice update, we would like to remind veterinary surgeons and veterinary nurses of the rules and responsibilities around pet/ animal insurance, particularly around recommending or even setting up a particular insurance policy to your clients.

Ensuring you get insurance right

We were recently contacted by the Financial Conduct Authority (FCA) as it had become aware of cases in which veterinary surgeons had potentially recommended or persuaded customers to take out pet insurance with a certain company, or had even helped their customers set up a particular insurance policy.

The FCA is reminding vets and vet nurses that the recommending and promoting particular insurance policies and/or setting them up on behalf of clients are likely to be regulated activities under the Financial Services and Markets Act (or FSMA). This means that, in order to lawfully undertake these activities, the person who is recommending and/or setting up the insurance policy for clients needs to be properly authorised to do so under the FSMA or be otherwise exempt. Anyone who undertakes such activities without the correct authorisation status may be committing a criminal offence otherwise.

According to the FCA, an alternative to being authorised under the FSMA is to become an appointed representative (or AR) for an insurance provider that is directly authorised by the Financial Conduct Authority. A person acting as an AR for an authorised firm is only permitted to carry out those activities covered by its appointment. So, for example, if an AR was limited to making introductions to a particular brand of pet or animal insurance, it would be illegal for them to recommend or persuade a client towards this brand, as well as illegal to set up an insurance policy for them with the brand on their behalf.

The FCA has said that veterinary practices must therefore take steps to consider whether their involvement in relation to pet insurance amounts to a regulated activity and, if they are an AR, whether it is within the scope and bounds of this appointment.

Further information about the various activities that require authorisation by the FCA can be found in the organisation’s Perimeter Manual.

Further information about the rules and responsibilities for veterinary surgeons and veterinary nurses around animal/ pet insurance can be found in paragraphs 9.32 to 9.38 of Chapter 9 (‘Practice information, fees and animal insurance’) of the supporting guidance to the RCVS Code of Professional Conduct.