Compliance with CP116

PwC Financial Consulting DAC provides insurance intermediary services through insurance companies it holds agencies with. It acts as an intermediary between you, the consumer, and the product provider with whom the insurance intermediary services are placed. Remuneration is provided by way of commission payments from the insurance provider.

Compliance with CP116 – background

Pursuant to provision 4.58A of the Central Bank of Ireland's September 2019 Addendum to the Consumer Protection Code, all intermediaries, must make available in their public offices, or on their website if they have one, a summary of the details of all arrangements for any fee, commission, other reward or remuneration provided to the intermediary which it has agreed with its product producers.

What is remuneration?

Remuneration is the payment earned by the intermediary for work undertaken on behalf of both the provider and the consumer. The amount of remuneration is generally directly related to the value of the products sold.

What is a commission?

Commission is payment that may be earned by an intermediary for work undertaken for both provider and consumer. There are different types of remuneration and different commission models:

• Single commission model: where payment is made to the intermediary shortly after the sale is completed and is based on a percentage of the premium paid, amount invested or amount borrowed.
• Trail or renewal commission model: further payments at intervals are paid throughout the lifespan of the product.
• Indemnity commission: the term used to describe a commission payment made before the commission is deemed to be 'earned'. Indemnity commission may be subject to a clawback (see below) if the consumer lapses or cancels the product before the commission is deemed to be earned.

Other forms of indemnity commission are advances of commission for future sales granted to intermediaries in order to assist with set up costs or business development.

Life assurance, investments or pension products

For Life Assurance products commission is divided into initial commission and renewal commission (related to premium), fund-based or trail (relating to accumulated fund). Trail commission, bullet commission, fund-based, flat commission or renewal commission are all terms used for ongoing payments.

Where an investment fund is being built up through an insurance-based investment product or a pension product, the increments may be based on a percentage of the value of the fund or the annual premium. For a single premium or lump-sum product, the increment is generally based on the value of the fund.

Life Assurance products fall into either individual or group protection policies and investment or pension products would be either single or regular contribution policies. Examples of products include life protection, regular premium life assurance investments, single premium (lump sum) insurance-based investments, and single premium pensions.

Clawback

Clawback is an obligation on the intermediary to repay unearned commission. Commission can be paid directly after a contract is concluded but is not deemed to be 'earned' until after a specified period of time. If the consumer cancels or withdraws from the financial product within the specified time, the intermediary must return commission to the product producer.

Other fees, administrative costs or non-monetary benefits

The firm may also be in receipt of other fees, administrative costs, or non-monetary benefits such as attendance at product provider seminars.

Details of the commission payments PwC Financial Consulting DAC can receive from each of the insurance companies it holds an agency with are enclosed in the PDF below.

Sustainable Finance Disclosure Regulation (SFDR)

This EU Regulation is effective from 10 March 2021. The key product providers we work with have developed responsible investment as part of their investment philosophies, and sustainability policies. However, detailed information on specific fund recommendations we recommend is not always available.

As the area of the SFDR is new and evolving, without sufficient information being currently available from providers, we do not currently assess the adverse impact of investment decisions on suitability, when providing investment or insurance advice.

We will continue to monitor the approach being taken by product providers, and their internal or external fund managers, as further information becomes available to us.

Sustainability remuneration policies

We are remunerated by commission and other remuneration from product providers. The key product providers with which we engage, and receive remuneration from, have developed responsible investment as part of their investment philosophies and sustainability risk policies.