Demands and needs statement: non-advised sales

The FSA offers flexibility as to the format of the Demands and Needs Statement for non-advised sales, but whatever the format it must implement TCF by:

making clear to the customer the key features and exclusions of the policy
highlighting any elements of the policy that don’t meet their demands/needs
not using language that appears to recommend any particular policy over or above another

Approaches can include:

Providing a ‘Key features’ document as an alternative to a policy summary

The content and format of the Key features document would need to comply with the FSA rules at ICOB 5.5.4R (opens new window)

Creating a Demands and Needs Statement by asking questions in a certain way on the application form

For example:

'If you answer 'YES' to Questions 1 and 2 and 3 your demands and needs are those of an employee whose wishes to ensure that your mortgage payments are covered now and for the next X months
If you answered ‘YES’ to Question 6 your demands and needs are for a policy that offers flexibility for you to cancel before the end of the contract period
If you answered ‘YES’ to Question 7 and ‘YES’ to question 8 your demands and needs are for a policy that allows you to add the premium to the mortgage loan but also to receive a refund if you cancel early after paying a one-off upfront premium
If you answered ‘YES’ to Question 7 and ‘NO’ to question 8 your demands and needs are for a policy that allows you to add the premium to the mortgage loan but not necessarily to receive a refund if you cancel early
etc

Creating a product-specific Demands and Needs Statement that will be appropriate for anyone wishing to buy a particular policy

For example:

'This MPPI policy meets the demands and needs of those:

who are aged X-Y
live in the UK for at least 40 weeks of the year
started their employment at least X months ago
etc

and wish to:

cover their mortgage payment for at least X months in the event of an accident, sickness or involuntary unemployment
receive payments within X months of the above event occurring
pay their premiums monthly and have the right to cancel any time…’
etc

Giving a customer a written record of the demands and needs you have discussed with them.

This will be made up of information gathered during the Fact Find and Eligibility Check. For an overview of the likely key content, see the Demands and needs checklist: non advised sales.

Please note that the above options are neither exhaustive nor prescriptive. Please refer to the FSA rules for detailed guidance on the information you need to provide to customers for non-advised sales.

FSA related links

Statements of demands and needs – FSA rules (opens new window)
Payment protection insurance factsheet (PDF document, 88K)