Markets in Financial Instruments Act 2018

Amendment of definition of “long-term financial service” in Financial Services and Pensions Ombudsman Act 2017

9. (1) Section 2 (1) of the Financial Services and Pensions Ombudsman Act 2017 is amended by the substitution of the following for the definition of “long-term financial service”:

“ ‘long-term financial service’ means—

(a) subject to paragraph (b) and subsection (3), a financial service the duration of which is a fixed term of 5 years and one month, or more, but, notwithstanding that the aggregate term of them may be 5 years and one month (or more), there does not fall within this paragraph a series of consecutive terms in respect of a financial service’s duration (provided no individual one of them is 5 years and one month, or more, in length), or

(b) a financial service that is—

(i) life assurance to which, by virtue of Regulation 4 of those Regulations, the European Communities (Life Assurance) Framework Regulations 1994 ( S.I. No. 360 of 1994 ) apply (not being life assurance falling within Class VII defined in the first Annex thereto), or

(ii) life assurance to which the European Union (Insurance and Reinsurance) Regulations 2015 ( S.I. No. 485 of 2015 ) apply (not being life assurance falling within paragraph 7, 8 or 9 of Schedule 2 thereto),

regardless, in either case, of whether the term of such life assurance is fixed at a specified calendar period or not;”.

(2) Section 2 of the Financial Services and Pensions Ombudsman Act 2017 is amended by the insertion of the following after subsection (2):

“(3) Notwithstanding the fact that the financial service does not fix its duration to be of a term such as is referred to in paragraph (a) of the definition of ‘long-term financial service’ in subsection (1), a financial service shall be regarded as falling within that definition if it would be reasonable for a consumer to expect its duration to be of at least the length referred to in that paragraph and that reasonable expectation arises by reason of—

(a) the manner in which the financial service operates to provide a financial benefit to the consumer,

(b) the type of assets with which its operation is connected, or

(c) representations made by the financial service provider,

as distinct from where such an expectation arises in the case of—

(i) a current account with a financial institution, or

(ii) any other financial service of an indefinite duration that is widely available and does not possess specialised characteristics.”.