A solicitor employed by a conveyancing firm that is a member of the Solicitors Regulation Authority (SRA) is helping a client with the sale and purchase of a family home. During the process, the solicitor discovers an issue related to the title of one of the properties involved. As a solution, the solicitor suggests the client take out defective title insurance to safeguard against any potential risks. However, it's important to note that neither the solicitor nor her firm is authorized by the Financial Conduct Authority to carry out any regulated activities as defined in the Financial Services and Markets Act 2000 (FSMA) and related secondary legislation.
What is the most accurate advice about purchasing defective title insurance under the FSMA?
A solicitor employed by a conveyancing firm that is a member of the Solicitors Regulation Authority (SRA) is helping a client with the sale and purchase of a family home. During the process, the solicitor discovers an issue related to the title of one of the properties involved. As a solution, the solicitor suggests the client take out defective title insurance to safeguard against any potential risks. However, it's important to note that neither the solicitor nor her firm is authorized by the Financial Conduct Authority to carry out any regulated activities as defined in the Financial Services and Markets Act 2000 (FSMA) and related secondary legislation.
What is the most accurate advice about purchasing defective title insurance under the FSMA?
The solicitor's firm needs to appoint an insurance distribution officer before carrying on the regulated activity.
(B) If a firm is involved in activities related to insurance policies, it must meet additional requirements. These requirements include appointing an insurance distribution officer, notifying the SRA that the firm is carrying out activities related to insurance policies, and being added to a register of providers.
Option (A) is incorrect because there is a specified investment involved in this case, which is the insurance policy.
Option (C) is incorrect because the incidental exclusion is not applicable when the specified investment is an insurance policy, as in this case.
Option (D) is incorrect because the requirement is for the firm to notify the SRA, not the Financial Conduct Authority, that it is carrying on activities related to insurance policies.
Option (E) is incorrect because the exemption of Designated Professional Bodies is applicable when insurance policies are involved. It is the incidental exclusion, as explained before, which is not applicable to insurance policies.