Premia Solutions by DenfieldAdvertising

Premia Solutions Appointed Representative Program Compliance Manual

Contents Compliance Manual 1 Introduction............................................................................. 3 2 The FSA Handbook................................................................. 4 3 Company Procedures.............................................................. 6 4 Promotions (Advertising and Marketing)................................... 7 5 Complaints Handling............................................................... 8 6 Training and Competence........................................................ 9 7 Data Protection..................................................................... 10 8 Money Laundering................................................................. 11 9 Treating Customers Fairly...................................................... 12

Complaints Procedure 10 Introduction......................................................................... 13 11 Providing Products.............................................................. 14 12 Treating Customers Fairly Strategy....................................... 15

Compliance Manual Introduction The purpose of this introduction is to explain in a little more detail how financial services have changed since 1986 and the impact that this has had upon the consumer and the firm. This is by no means a detailed analysis, but it should provide you with a broad overview of the changes.

Regulation The regulation of financial markets and services is a relatively new phenomenon in the United Kingdom. Prior to April 1988 the investment management, life and pensions, and securities markets had effectively not been policed other than by General (including Commercial) Law and trade bodies, and they were very much a law unto themselves as far as consumer protection was concerned. This all changed in 1988 when the Financial Services Act came into force and created industry watchdogs – Self Regulatory Organisations (“SROs”) – that assumed responsibility for market conduct and controlling the companies that operated therein. Things remained fairly static until 2000 with little change other than some SROs merging. Then the Financial Services and Markets Act created a new super regulator – the Financial Services Authority (“FSA”) – in response to criticism concerning the effectiveness of self regulation. This change was also a reflection of the political climate; the European Union (“EU”) and national governments had started to address the issue of financial services regulation. One result was that the EU Insurance Mediation Directive applied to those firms which operated in the general insurance broking market and they fell within the scope of regulation from January 2005.

How This Affected General Insurance General insurance contracts are considered to exist where there is a pure protection contract in place and there is no investment element. Examples of this are buildings and contents or motor insurance; however, this is by no means an exhaustive definition. There remained an element of choice available to those operating in the motor industry – did they wish to continue offering general

insurance to their clients and operate in the regulated market? For a considerable number of firms this was not a particularly difficult choice, as they were “secondary intermediaries”; the insurance they offered was done so by way of other activities as opposed to being their primary business. Examples of secondary intermediaries are groups such as estate agents, property letting agents and car dealerships. Quite a considerable number of these elected to not become regulated and cease insurance broking activity. This was not necessarily to the detriment of their customers as they could still refer them on to brokers if they wished, either by means of an introducer arrangement or an ad hoc arrangement if referrals were to be less frequent.

Conclusion The changes made to financial services regulation since 1986 have been significant. From a situation where the client had virtually no protection from malpractice and unethical activity, we today find ourselves in an environment where nearly all financial services are regulated and the consumer has legal and regulatory protection. Those firms which act beyond the law have been, or will be, the subject of disciplinary action either by the regulator and/or criminal prosecution by the state. As we have chosen to become an “Appointed Representative” (AR) of Premia Solutions Limited (PSL), we have elected to act ethically and within the bounds of the law. To become an AR we had to meet certain standards and convince both Premia Solutions & the FSA that we are fit and proper. To retain our status we must at all times comply with the law and the FSA Rules as detailed in their Handbook.

Data Protection and Money Laundering The company’s responsibilities for compliance with the provisions of the Data Protection Act (1998), the Money Laundering regulations (2003) and the Proceeds of Crime Act (2002) are included within this manual. The FSA Handbook, which is available upon request from PSL or directly from the FSA website details the conditions, regulations and rules that an AR must abide by. It is the General Insurance Broker tailored version of the Handbook that applies to us.

The FSA Handbook High Level Standards

Systems and Controls

Principles for Business:

A firm must take reasonable care to establish and maintain such systems and controls as are appropriate to its business.

The Handbook details a number of High Level Standards: Integrity A firm must conduct its business with integrity. Skill, care and diligence A firm must conduct its business with due skill, care and diligence. Management and control A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems. Financial prudence A firm must maintain adequate financial resources. Market conduct A firm must observe proper standards of market conduct. Customer interests A firm must pay due regard to the interests of its customers and treat them fairly. Communications with clients A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading. Conﬂicts of interest A firm must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client. Customers: relationships of trust A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgement. Clients’ assets A firm must arrange adequate protection for clients’ assets when it is responsible for them. Relations with regulators A firm must deal with its regulators in an open and cooperative way, and must disclose to the FSA appropriately anything relating to the firm of which the FSA would reasonably expect notice. The above principles for business are the standards that we adhere to as an “Appointed Representative”.

Senior Management Arrangements, Systems and Controls The Handbook states: “A firm must take reasonable care to maintain a clear and appropriate apportionment of significant responsibilities among its directors and senior managers in such a way that: • It is clear who has which of those responsibilities. • The business and affairs of the firm can be adequately monitored and controlled by the directors, relevant senior managers and the governing body of the firm. • A firm must make a record of the arrangements it has made to satisfy SYSC 2.1.1 R (apportionment) and SYSC 2.1.3 R (allocation) and take reasonable care to keep this up to date.

The section also details the main issues that should be considered when establishing and maintaining Systems and Controls SYSC 3.2.

Guidance on Public Interest Disclosure Act: Whistleblowing A firm must have in place a procedure to allow its staff to disclose, in a confidential manner, acts that are not in the public interest. Procedures in respect of Whistleblowing are detailed further on in this manual.

Threshold Conditions The Threshold Conditions detail the conditions that a firm must achieve to become authorised and continue to satisfy to maintain their authorisation.

Statements of Principle (SoP) and Code of Practice for Approved Persons. The Statements of Principle are listed below: • An approved person must act with integrity in carrying out his controlled function. • An approved person must act with due skill, care and diligence in carrying out his controlled function. • An approved person must observe proper standards of market conduct in carrying out his controlled function. • An approved person must deal with the FSA and with other regulators in an open and cooperative way and must disclose appropriately any information of which the FSA would reasonably expect notice. • An approved person performing a significant influence function must take reasonable steps to ensure that the business of the firm for which he is responsible in his controlled function is organised so that it can be controlled effectively. • An approved person performing a significant influence function must exercise due skill, care and diligence in managing the business of the firm for which he is responsible in his controlled function. • An approved person performing a significant influence function must take reasonable steps to ensure that the business of the firm for which he is responsible in his controlled function complies with the relevant requirements and standards of the regulatory system. • The Code of Practice is as detailed on the appropriate FSA web pages.

Fit and Proper test for Approved Persons

Regulatory Processes

Those who perform a controlled function should be registered with the FSA as an Approved Person. In order that they can become an Approved Person they must satisfy the conditions as detailed in this section.

The Supervision Manual specifies the FSA’s approach to the supervision of markets.

Our Approved Person(s) is: Mr Hady Laba

General Conditions This section of the Handbook deals with a number of issues including: • Not misleading clients with respect to authorisation by the FSA • Interpretation of the handbook • Status disclosure • Use of the FSA and key facts logos • Insurance against financial penalties.

Items that are of particular interest are: • The FSA’s approach to supervision • Applications to vary and cancel Part IV permission • Individual guidance • Approved Persons • Notifications to the FSA • Reporting requirements However, the above listed are only a selection of the material within the manual.

Redress This part of the Handbook details how customer complaints should be dealt with and should be read in conjunction with the firm’s own Complaints Procedures.

Business Standards The contents of this section are those that impact most significantly upon the day to day activities of the firm and everyone working for it. Insurance: Conduct of Business (“ICOB”) ICOB is made up of the following sections: • Application • General Matters • Distance Communications • Information about the firm, its services and remuneration • Identifying client needs and advising • Product Information • Cancellation • Claims Handling It is not possible to provide a brief summary of the content of ICOB. The section headers themselves provide sufficient explanation of the content of each. Of more importance is the relevant company procedure that applies in respect of each, and which is linked accordingly within the relevant section.

Client Assets The section for Client Assets details rules that relate to holding client assets and money. In respect of the insurance products which we provide, PSL have contractually agreed a risk transfer.

Training and Competence As an AR we are committed to investing in our staff and we demonstrate this by way of providing training and development opportunities for all those that work for us. The primary obligation is to ensure staff achieve and maintain the level of competence set out by PSL in the Training & Competence Standards within this document.

Company Procedures Regulatory Obligations As an AR we must have in place appropriate Systems and Controls. These include: • Sales process for PSL to Audit • Recruitment Process • Complaints Handling Process. • Training & Competence Arrangements

Promotions (Advertising and Marketing) Submission of material

Recordkeeping

All proposed material in respect of financial promotion, advertising of insurance products for gratis or otherwise, should be submitted to a member of the PSL management team for approval and must not, in any circumstances, be used until approval has been received.

PSL will maintain a copy of all material submitted; whether it was approved or not; and a hard copy of the final material. These records must be kept for at least 3 years after the expiry date or if approval were not given, the date of submission. We are committed to dealing with all complaints in a timely and impartial fashion.

Approved Material Only material approved, including all amendments, may be used.

Complaints Handling Procedures Who to refer complaints to All complaints in the first instance should be dealt with by Glyn Hopkin Limited. Complaints should be sent in writing to the address as detailed on the Initial Disclosure Document.

By the end of eight weeks after its receipt of a complaint, (unless DISP 1.4.3A R or DISP 1.4.9 R applies) send the complainant either: A final response; or A response which:

Receipt of complaint & acknowledgement Written acknowledgement of the complaint must be sent to the complainant within five business days of its receipt, giving the name or job title of the individual handling the complaint for the firm (together with details of the firm’s internal complaint handling procedures). If we are able to provide a final response within five business days of receipt of a complaint, we are permitted to combine its acknowledgement of the complaint with the final response. As an AR we aim to resolve all complaints at the earliest possible stage. If we are unable to resolve the complaint to the customer’s satisfaction, the customer should be referred to PSL who will adhere to their own complaints handling process. PSL would request full details of the complaint including supporting documentation in order to deal with the complaint accordingly.

Keeping the complainant informed of progress Complainant must within 4 weeks of the Company receiving the complaint, be sent either: A final response; or A holding response, which explains why the Company is not yet in a position to resolve the complaint and indicates when the firm will make further contact (which must be within eight weeks of receipt of the complaint).

Explains that the Company is still not in a position to make a final response, gives reasons for the further delay and indicates when it expects to be able to provide a final response; and Informs the complainant that he may refer the complaint to the Financial Ombudsman Service if he is dissatisfied with the delay and encloses a copy of the Financial Ombudsman Service’s explanatory leaflet.

The Final Response When the complainant is sent its final response, this must: Inform the complainant that he may refer the complaint to the Financial Ombudsman Service if he is dissatisfied with the final response and that he must do so within six months; and Enclose a copy of the Financial Ombudsman Service’s explanatory leaflet (unless it has already done so).

Record Keeping Details of complaints must be kept for a minimum of 3 years from the date of receipt of the complaint.

Training & Competence Strategy The Financial Services Authority (FSA) requires that PSL and its Appointed Representatives (AR’s) are judged to be “competent” for the role that they as a company, and as individuals representing the company, perform and that they are continually assessed to ensure that they remain so. PSL aims are consistent with that of the FSA, namely: • To maintain market confidence in insurance products • Promote public awareness of the FSA • To protect both the customer & dealer • To reduce financial crime.

How is this done? To be deemed competent, when an individual joins us, they will undergo on-the-job / induction training and computer based training. In the latter cases they will be tested and pass the relevant modules. The training website is www.premiatraining. com/network. Every staff member will be assigned a user name and password for their own individual records.

Standard of what is deemed ‘competent’? Each eligible employee will have to complete 2 competent supervised sales in the first 8 months of each training year and complete and annual online assessment training. This is in addition to any additional ongoing training that will be provided in respect of regulation and sales practices.

Record-keeping All online training records will be maintained on the ”PSL Professional” training site, however it is essential that PSL and the ARs maintain a paper record of all training received that should be recorded by date and subject matter and signed off by the appropriate supervisor. The supervisor will maintain a file which holds paper records of all activity that he has supervised. This file will be held on-site. Should ANY member of staff leave the company, their employee file is to be passed to the FSA Compliance Manager.

Competence in each area will be assessed and tested to demonstrate a thorough generic understanding of each product. They will also complete 2 competent supervised sales. With these the supervisor will observe how they deal with clients and comply with the relevant standards.

Data Protection Procedures It is our policy to take all necessary steps to ensure that all personal data held about our employees, customers, suppliers and all other individuals is processed fairly and lawfully. We will take all reasonable steps to implement this policy.

We have a responsibility to ensure that personal data dealt with in the course of our business is handled in accordance with statutory requirements and reasonable steps will be taken by all concerned to ensure this duty is observed.

We will implement and comply with the eight Data Protection Principles contained in the Data Protection Act 1998 (“the Act”) which promote good conduct in relation to processing personal information. These Principles are:

Security of Data

• Personal data shall be processed fairly and lawfully; • Personal data shall be obtained only for one or more specified and lawful purposes, and shall not be further processed in any manner incompatible with that purpose or those purposes; • Personal data shall be adequate, relevant and not excessive in relation to the purpose or purposes for which they are processed; • Personal data shall be accurate and, where necessary, kept up to date; • Personal data processed for any purpose or purposes shall not be kept for longer than is necessary for that purpose or those purposes; • Personal data shall be processed in accordance with the rights of data subjects under the Act; • Personal technical and organisational measures shall be taken against unauthorised or unlawful processing of personal data and against accidental loss or destruction or, damage to, personal data; and • Personal data shall not be transferred to a country or territory outside the European Economic Area unless that country or territory ensures an adequate level of protection for the rights and freedoms of data subjects in relation to the processing of personal data.

All personal data held by ourselves is to be treated as strictly confidential. Personal data must not be disclosed to anyone outside of our firm and PSL unless the individual concerned has consented to such disclosure, or the Data Protection Officer has given you a specific instruction to do so. Personal data must not be disclosed to any unauthorised employees. The Data Protection Officer will establish and control personal data access. User passwords will be issued to relevant employees who deal with computerised personal data. Such user passwords are not to be disclosed to any third party or unauthorised employee. Individuals will have a right, on written request, to obtain a copy of such personal data relating to him/her held by ourselves and PSL as is required under the Data Protection Act 1998. All requests by individuals for information about personal data we hold about them must be referred, immediately on receipt, to the Data Protection Officer who will co-ordinate the response to the relevant individual.

Anti-Money Laundering Procedures The Money Laundering Regulations 2003 and Proceeds of Crime Act 2002 are the relevant pieces of legislation that deal with antimoney laundering. We must comply with these laws. The key features to remember are that we must: • Appoint a Money Laundering Regulating Officer (“MLRO”). We have appointed (‘ ‘) as the MLRO. The MLRO is responsible for the oversight of antimoney laundering strategy and is responsible for the implementation and maintenance of antimoney laundering policies and procedure as well as being the decision maker for referrals to the National Criminal Intelligence Service (“NCIS”);

What does this mean to me? In very simple terms you must always confirm the identity of a client – person or company – when you undertake business where payment(s) will total £10,000 or more: To confirm identity you will need to see the originals of: • Current Passport or Photo Driving Licence (and second part); and council tax demand or utility bill (electricity, gas, telephone). • If you have any suspicions OR the client cannot provide these documents YOU MUST report the matter to the MLRO. BUT do not “tip the client off”.

• Train all staff in the Money Laundering Regulations and keep them up to date with legislation changes and court decisions;

As soon as you have reported the matter to the MLRO, you need not take any further action.

• Establish systems to Know Your Client/Customer (“KYC”) and document all KYC evidence;

The MLRO will never let you know what action has been taken and you should not ask. If you ever have any questions or concerns get in contact with the MLRO.

• Confirm and verify the identity of the person or company with whom there is a business relationship where total cash payments are £15,000 (£10,000) or greater; • Retain identification documents to support the transactions for five years after the third party ceases to be a client, or the date on which business is completed; • Be alert for suspicious transactions; • Report suspicious transactions to the MLRO; • The MLRO must consider whether any referral from staff should be reported to the NCIS and record their decision; • Not ‘tip-off’ the third party, or anyone else, that they are being reported to the MLRO and/or NCIS. Any failure to take any of the above actions constitutes a criminal offence that can potentially lead to a ﬁne and up to 14 years’ imprisonment.

Treating Customers Fairly This details our approach to Treating Customers Fairly (TCF). This approach has been developed and endorsed by our senior management and all employees involved in the General Insurance activities of the company.

Objective Our objective is to treat our customers fairly in all our dealings with them and we aim to achieve this by: • Providing products that meet customer requirements. • Ensuring that we administer new and existing policies accurately and in a timely manner. • Managing any complaints we receive promptly and fairly in accordance with our complaints handling procedure. • Training our staff to ensure they have suitable and current skills to undertake their job effectively. • Monitoring and regularly reviewing our business activities to ensure that we are working in the best interests of both our customers and Premia Solutions Limited (PSL). All of the above points are explained in greater detail in the following Sections of this document. One of our reference points for preparing our TCF strategy was a speech given by Clive Briault, Managing Director, Retail Markets, FSA. It was given at an insurance sector conference on 20 March 2006. We have quoted part of the speech below, which we feel encompasses the key aspects of TCF.

Speech by Clive Briault “Embedding means that the fair treatment of customers is established throughout the business. We will be looking for evidence that firms really have incorporated Treating Customers Fairly throughout their operations and processes. We will be looking not only at systems and controls, but at all aspects of the business culture. This will include people issues such as training and competence; remuneration; and performance management. We also expect senior management to ensure that they have the right management information and other data to enable them to satisfy themselves that they are treating their customers fairly in practice. We see embedding as a continuous process – firms must understand that this is not a short-term project that can be completed and then put to one side. Firms need to show that Treating Customers Fairly will be reflected in their processes and strategy going forward. As I said at the outset, not only is Treating Customers Fairly an important tool to help us achieve efficient retail markets but if it is to have any real meaning it must lead to real change in the behaviour of firms.”

10 Complaints Procedure

We are committed to dealing with all complaints in a timely and impartial fashion.

Who to refer complaints to All complaints in the first instance should be dealt with by the AR. Complaints should be sent in writing to the address as detailed on the Initial Disclosure Document.

A final response; or A response which: Explains that the Company is still not in a position to make a final response, gives reasons for the further delay and indicates when it expects to be able to provide a final response; and Informs the complainant that he may refer the complaint to the Financial Ombudsman Service if he is dissatisfied with the delay and encloses a copy of the Financial Ombudsman Service’s explanatory leaflet.

Record keeping Details of complaints must be kept for a minimum of 3 years from the date of receipt of the complaint.

Performance Indicators The complaints log which should detail the name of the client, nature of their complaint and whether it was upheld or not provides a valuable insight into any trends that may exist in the way in which business is conducted. It is imperative that regular reviews take place of the complaints received to highlight any potential weaknesses that should be rectified. The general insurance products that we offer are related to the motor industry and financing of motor vehicles. As a business we have decided to sell all insurance products on a non-advised basis.

11 Providing Products Product Cover Our products are simple, with clearly defined terms and conditions to ensure that the customer can understand exactly the cover they have bought and what they need to do in the event of a claim. We strive to simplify the message, features, benefits and exclusions and ensure consistency of words across all product documentation. We aim for our documentation to be clear, fair and not misleading. Each product has its own simple summary of cover that explains the significant benefits and exclusions of the policy to the customer.

Product Pricing We agree parameters for retail pricing to ensure that retail pricing is fair and reflects the cover being provided. We also look to other markets for guidance.

Point of Sale System We use a bespoke, web-based point of sale system to sell PSL products. The system is designed specifically for motor related insurance products and ensures that all relevant information is captured before products are presented to customers.

12 TCF Strategy

What does TFC mean for us Who is responsible for our TCF strategy?

Product design and pricing, including risk and complexity of products

Responsibility ultimately lies with the Senior Management Team. However, it is the responsibility of all employees engaging in insurance mediation activity within the company to adhere to the company’s TCF strategy and all employees will receive continuous guidance on our TCF commitments.

Having assessed our customer’s needs, we are able to provide them with simple to understand products. Current pricing is in line with our efforts to provide value for money and we are comfortable that they also perform as they when our customers need to claim on them.

Where does it ﬁt with core business?

Our marketing and promotional material is designed to present the customer with clear, fair and non-misleading information about the products we offer.

Treating Customers Fairly is an integral part of how we express our business ethics. As far as our core business of vehicle finance and leasing is concerned, treating customers fairly is an important part of the overall customer experience. Our customer needs and philosophy Our customers will have individual needs. As part of our commitment to them, we will establish those needs and endeavour to present 100% of products to 100% of our eligible customers 100% of the time.

Marketing and promotional material and disclosures

The sales process, advice given and information provided to customers As an Appointed Representative of PSL we have elected to sell on a “non-advised” basis. This approach allows us to present to our customers those products for which they are eligible. The customer will then be able to make an informed buying decision. Staff training

Our customers’ needs

We are totally committed to the training of our employees involved in the sale of general insurance products. We assess competence regularly and all employees are monitored and supervised appropriately to ensure that competence is maintained.

We strive to understand our customer needs by reviewing the risks associated with the purchase or financing of a motor vehicle.

Staff remuneration

Assess current performance and identify gaps in achieving TCF.

Business partner involvement We have chosen Premia Solutions Limited (PSL) as our partner for insurance products. We believe that they are best placed to provide us with products, which complement our customer’s needs and provide us with robust processes that help us to meet our objectives. Our partnerships are determined on the basis of previous relationships as well as by market comparison. This is reviewed internally from time to time.

Our remuneration package is designed to be fair to the employee and reward them for their efforts, whilst ensuring that customers are not “induced” into buying unsuitable products or being offered products that are of purely commercial benefit to us. This is reviewed from time to time and can form part of an employee’s contract of employment.

Information and customer support post the sale

Implementation and Monitoring

We are always looking at ways to improve the customer experience. As part of our duty of care to our customers we are in regular contact post-sale. This allows us to ensure that our customers remain satisfied with their purchase(s) and helps us to build better relationships with them. Repeat business is a fundamental part of our core activity and we remain committed to ensuring that we give customers the opportunity to return to us for their future needs.

In terms of implementation and monitoring of our TCF commitments, we have the following core requirements covered:

Complaints handling As an AR and holders of a Consumer Credit Licence we have a documented Complaints procedure, which all employees are familiar with. Complaints are reviewed monthly at Director level and action taken as appropriate. Management information Management information available to us helps us to identify Key Performance Indicators (“KPIs”) that tell us if we are meeting our TCF objectives. Product Sales reports, detailed by individual sales person, helps us manage our team commitment of offering 100% of products 100% of the time. The management information we use allows us to monitor performance and trends, which in turn allows us to assess training requirements, whether in respect of product knowledge or sales skills. Equally, cancellation and complaints monitoring provides us with excellent customer feedback, which again enables us to look at individual performance. Sample reports are set out further in this document. Customer satisfaction surveys and telephone service calls From time to time, and in accordance with Data Protection Rules, we may engage in customer surveys to find out how we can improve our service delivery and where we can innovate. As customer feedback is important to us, and we value any and all contributions, anything in any of our processes that a customer expresses dissatisfaction with is taken seriously and acted upon where required.

Premia Solutions Limited

3 Corunna Court, Corunna Road, Warwick CV34 5HQ. Tel: 0845 873 1390

Senior management involvement Director and Sales Managers are key drivers of TCF. Ensuring that TCF is embedded in the business by means of “sympathetic” training – the “how can we help?” attitude as opposed to the “what do you want?” Directors and Sales Managers are directly responsible for the professional conduct of all employees and continually strive to ensure that the customer experience is a positive one. Communicating changes through to staff and rewarding those who excel in providing the customer with quality service. Effective communication is a core part of how we conduct business in the first instance. We will always look to our staff for examples of “best practice” and praise those whose customer feedback is continually positive. Feed TCF into the staff objective process. All staff are committed to ensuring that all customers are treated equally, professionally and, thus, fairly. Staff objectives are clear and this is fed into their objectives by the appropriate manager / supervisor. Change is appropriately prioritised and resourced At monthly meetings, any required change is identified and those responsible for it nominated and given the appropriate resource to carry out those changes. Management consistently applies an “open door” policy to ensure that all staff are comfortable in raising issues without fear of rebuke or censure.