What does the law say about Life Insurance?

You need to live in the UK to purchase Life Insurance from a UK Life Insurance company.

• Life insurance is entirely voluntary. There are no laws that say you have to have it.
• UK Insurance companies are subject to all UK corporate laws.
• There are also laws that are specific to the Insurance industry.
• The Data Protection Act is concerned with how your data may be stored and used.
• There should be a privacy statement on a web site that sells Life Insurance.
• The most important piece of legislation affecting the promotion of financial services is the Financial Services and Markets Act (2000).

The following information is about the legal aspects we think you’ll be most interested in. It is relevant if you are buying Life Insurance through the Internet. The information is neither definitive nor exhaustive but simply an introduction.

If you require more information relating to the regulation of Life Insurance Companies or insurance brokers, we recommend visiting the Financial Services Authority’s web site at www.fsa.gov.uk.

You must live in the UK in order to take out a Life Insurance policy from a UK based Insurance Company. This isn’t specifically laid down in UK law, but UK laws and tax regulations make it impossible for a UK based Insurance Company to offer Life Insurance to anyone other than a UK resident.

There are no laws in the UK that stipulate that a person must have Life Insurance. It is an entirely voluntary form of insurance.

As a UK resident you buy Life Insurance from a UK based Insurance Company. As such, your Insurance Company is subject to all UK Corporate Laws. However, there are also Laws that apply solely to Insurance Companies. These regulate the value of the risks they take on in relation to their financial reserves, and they are designed to ensure that your Insurance Company will be in a position to pay if you claim.

The Data Protection Act 1998 is concerned with the way all UK organisations store, safeguard and use the data they have collected about people. This is particularly important within the Life Insurance industry as the companies involved accumulate significant amounts of personal information about you – your age and hobbies, as well as the very sensitive area of medical information. One of the key provisions of the Data Protection Act is that if a company wishes to pass on your personal information for marketing purposes, the company collecting the data must tell you this and give you the opportunity of refusing permission for your information to be used in this way.

All reputable web sites that sell Life Insurance will have a “Privacy Statement” which tells you how they handle your information and how they use it. We suggest you read the Privacy Statement.

The most important piece of legislation affecting the promotion of financial services is the Financial Services and Markets Act (2000). This Act is extremely complex but is primarily concerned with the protection of the consumer. Its provisions currently centre on investment products, investment institutions and the provision of investment advice. In early 2005 its Regulations are due to widen to include mortgages and general insurance, including Life Insurance.

Please note : The information contained within the FAQ section has been written by Mortgage Protected Online

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