The Compensation (Claims Management Services) Regulations 2006

PART 3 Grant of authorisations

Application for authorisations

8.—(1) A person must apply for authorisation in writing in the form approved by the Regulator for the purpose.

(2) The person must supply the information and documents required by the form in accordance with any directions on it.

(3) If the Regulator approves the use of an interactive system on line for the purposes of application, paragraph (2) requires an applicant to complete and submit an application, and provide documents, in accordance with the directions given by the interactive system.

(4) If the Regulator requires—

(a) more information than that given in the application; or

(b) another document;

to consider an application, the Regulator may ask for the information or document by written notice to the applicant.

(5) If the Regulator makes a request under paragraph (4), the period between when the Regulator makes the request and when the applicant provides the information or document requested does not count for the purposes of regulation 11.

(6) If the Regulator has authorised another person to carry out tasks of collecting information or otherwise processing applications, that other person may make a request under paragraph (4), and a request so made has the same effect as a request by the Regulator.

Payment of application fee

9.—(1) An application is not taken to have been made until the applicant has paid the application fee.

(2) If the Regulator has authorised another person to receive applications on his behalf, the application fee may be paid to that other person.

Decisions about authorisations

10.—(1) The Regulator must not grant an application for authorisation unless he is satisfied that the applicant is competent and suitable to provide the regulated claims management service to which the application relates.

(2) For the purposes of making a decision regarding the suitability of an applicant, the criteria are the following—

(a) that the applicant does not have a history of committing relevant criminal offences (in particular, perjury or an offence involving fraud, theft or false accounting, or in relation to financial services, consumer credit or consumer protection) or breaches of any law or rule of practice regulating the provision of financial, legal or other relevant services;

(b) there are no relevant proceedings (whether completed or not) in any court or tribunal, and in particular any proceedings in relation to financial services, consumer credit or consumer protection, against the applicant;

(c) if the applicant holds or proposes to hold clients’ money, the applicant has appropriate arrangements or proposed arrangements for holding such money; and

(d) that the applicant has no arrangements with another person that might expose it to any conflict of interest.

(3) For the purposes of making a decision regarding the suitability of an applicant, the Regulator may have regard to—

(a) the applicant’s financial circumstances;

(b) the applicant’s management arrangements, including—

(i) how financial and other control is exercised or is to be exercised;

(ii) who is responsible for the applicant’s financial and other management;

(iii) measures to maintain its solvency;

(iv) the provision of verified, certified or audited accounts;

(v) any previous relationship with a company that has become insolvent, or against which an insolvency petition has been brought;

(c) the applicant’s actual or proposed connections or arrangements with other persons, (including, in the case of an applicant that is a body corporate, its relationship with any parent or subsidiary company) and the applicant’s arrangements to avoid conflicts of interest;

(d) the applicant’s policies and arrangements or proposed arrangements for training, and monitoring the competence of, its staff, and for recruiting staff;

(e) the applicant’s practice or proposed practice in relation to providing information to clients about fees;

(f) the applicant’s arrangements or proposed arrangements for professional indemnity insurance.

(4) In the case of an applicant other than an individual, it is a criterion for the grant of an application for authorisation that—

(a) in the case of an applicant that is a body corporate, each of the applicant’s directors;

(b) in the case of an applicant that is a partnership or other body of persons, each of its members; and

(c) each other person who appears to the Regulator to be able to exert significant influence on the applicant’s policy or management;

is suitable to be associated with the provision of regulated claims management services of the kind to which the application relates.

(5) For the purpose of making a decision regarding the suitability of an individual to be associated with the provision of regulated claims management services, being an individual who is a director or partner of an applicant, or is otherwise able to exert significant influence on the applicant’s policy or management, the Regulator may have regard to—

(a) the individual’s criminal record (if any), and in particular any conviction for perjury, or an offence involving fraud, theft or false accounting, or in relation to financial services, consumer credit or consumer protection;

(b) whether the individual has ever been disqualified as a company director;

(c) any relevant proceedings (whether completed or not) of a body exercising functions in relation to a trade or profession, and in particular any proceedings that may result in the withdrawal or revocation of the right to practise a profession, engage in a business or provide a service;

(d) any withdrawal or revocation of his right to practise a profession, engage in a business or provide a service;

(e) his financial circumstances;

(f) his qualifications and experience.

Time for deciding applications

11.  The Regulator must decide to grant or refuse an authorisation within three months after the application for it is made.

Conditions of authorisation

12.—(1) The Regulator may grant an authorisation subject to a condition or conditions.

(2) In particular, and without limiting the effect of paragraph (1), a condition may be—

(a) if the authorised person was granted authorisation despite not satisfying a requirement for authorisation, that the person satisfies the requirement within a specified period;

(b) a condition as to the way in which the person provides the service;

(c) that the person provides only a specified service or services; or

(d) that the person provides a service only in specified circumstances.

(3) The Regulator may revoke the imposition of a condition on an authorisation if he is satisfied that it is no longer necessary for the authorisation to be subject to the condition.

(4) If the Regulator revokes the imposition of a condition, the Regulator must give the authorised person a new instrument of authorisation under regulation 13 that does not show the condition.

(5) In addition to any condition imposed by the Regulator, the following are conditions of an authorised person’s authorisation—

(a) that the person complies with the rules;

(b) that the person complies with any applicable code of practice;

(c) that if the person accepts referrals of potential clients from another person (not being a person required to be an authorised person), the person takes reasonable steps to ensure that the other person obtains the business in a way consistent with the rules;

(d) that the person complies with any direction of the Regulator under Part 5 (which deals with indemnity insurance);

(e) that the person permits inspection by the Regulator under Part 8 (which is about routine audit);

(f) that in each year, if the Regulator so requires by notice in writing, the person certifies in writing to the Regulator that during the past year the person has complied with the conditions mentioned in sub-paragraphs (a), (b) and (c) and any other condition of the authorisation specified in the notice;

(g) that in each year, within 1 month after the Regulator issues an invoice to the person for the annual fee, the person pays the Regulator the amount of that fee in accordance with the invoice;

(h) that the person complies with any direction under regulation 27 or 28(2);

(i) that the person implements, promptly and in full, any direction under regulation 29(1) or 29(3).

Grant and refusal of authorisations

13.—(1) If the Regulator has approved the grant of an authorisation to a person, and the person pays the fee for the first year of the authorisation’s currency, the Regulator must grant the authorisation by giving the person a written instrument of authorisation.

(2) The instrument of authorisation must specify a day as its date of effect.

(3) An authorisation—

(a) has effect from the date of effect specified in the instrument of the authorisation; and

(b) continues in effect until revoked or surrendered.

(4) If the Regulator grants an authorisation subject to a condition, the Regulator must set the condition out in the instrument of authorisation.

(5) If the Regulator refuses to grant an authorisation to a person, or grants an authorisation subject to a condition not sought by the person, the Regulator must give written notice to the person, setting out in the notice—

(a) the decision and the reasons for it;

(b) a brief statement of the evidence on which the Regulator relied; and

(c) a statement of the person’s right to appeal to the Tribunal, including the Tribunal’s address to which an appeal notice may be sent and the time limit for such an appeal.

Surrender of authorisations

14.—(1) An authorised person may surrender his authorisation by giving notice in writing to the Regulator.

(2) Such a notice has effect—

(a) if it specifies a day as the day on which it is to have effect, and that day is, or is after, the day on which the Regulator receives it, on the specified day; or

(b) in any other case, on the day on which the Regulator receives it.