LIFE COMPANIES

Life insurance companies are organised by having a head office in a major city and a number of branch offices in most of the other cities and towns in the United Kingdom. Each company is different in the way its branch offices operate. Some allow their larger branches almost complete autonomy whereas others are just receiving offices and a rigid control is maintained over them. At each branch there will be a manager. Although the authority he has will depend on the size of the branch, and the number of salesmen or 'inspectors' as they are usually called, working there. In smaller towns, or in largely country areas where an office does not have a branch, there will often be an inspector operating from home.

Life companies are authorised to carry on their business under the Insurance Companies Act 1982 and are regulated in this respect by the Department of Trade and Industry. Friendly societies are authorised under the Friendly societies Act 1974. However, the effect of the Financial Services Act is to require that the marketing activities of life companies are regulated and most companies have applied to the Personal Investment Authority (PIA) (a self regulatory organisation under the Act) for this purpose.

Some life companies employ salesmen to sell their products direct to the public. These are known as company representatives and generally they can only sell and give advice on the products of the company which employs them. Company representatives do not apply for authorisation to carry on investment business as those activities are the responsibility of the authorised company which employs them.