Which type of customers are typically afforded less protection under ICOBS rules?

Commercial customers are typically afforded less protection under ICOBS (Insurance Conduct of Business Sourcebook) rules primarily because the regulations are designed with the understanding that these customers are more experienced and knowledgeable about insurance products compared to individual consumers. ICOBS regulations aim to protect individual consumers, who may not have the same level of understanding or bargaining power in negotiations with insurers.

In the context of commercial customers, it’s expected that they possess a greater degree of expertise and resources to understand complex insurance terms and conditions. As such, the ICOBS framework is less stringent for these entities, allowing for greater flexibility in the types of products and terms offered. Commercial customers are assumed to engage in more sophisticated transactions and are generally not the primary focus of protections intended for individual consumers.

Consumer customers, high-risk customers, and general policyholders receive more focused protections because the premise of ICOBS is to safeguard less knowledgeable individuals from potential exploitation or misunderstanding of insurance contracts.