A distance contract to provide advice or information on non-investment insurance contracts, other than simply as part of the marketing stage in the sale of a contract. Specific FSA rules (ICOB 8) apply to these contracts with retail customers to implement the Distance Marketing Directive although such contracts rarely arise in the retail market.
Insurance Encyclopedia
Distance sales
Sales that are not conducted face-to-face, such as sales through the post, over the Internet or telephone or by fax or digital television. FSA rules take account of the Distance Marketing Directive. The initial contact disclosure for telephone sales involves disclosing the name of the firm, and, if the contact is initiated by the firm, the purpose of the contact. The name of the person in contact with the customer must also be given and his link with the firm. See DISTANCE NON-INVESTMENT MEDIATION CONTRACT.
Distress Insurer
An insurance company specializing in substandard risk, usually in the field of automobile insurance.
Distress termination
To close a pension plan that does not have sufficient funds to cover the benefits to which the plan’s participants are entitled.
Distribution
Separation of all prospective or presently insureds in group insurance plans by age, sex, location, income, status of dependency, and benefits for the purpose of computing premium rates.
Distribution bonds
See: INCOME BONDS.
Distribution channels
Various ways health plans and medical services are delivered such as insurance agents and brokers, pharmacies, pharmaceutical companies for drugs, and physicians.
Distribution expenses
Overhead costs in making insurance products available to the general public such as insurance agent compensation, group sales representatives’ salaries, postage, printing, and telecommunications for direct response marketing.
Distribution list
See: list service (listserv) .
Distribution network
the means by which a direct insurer markets its products to prospective policy holders (for example, agents, brokers, branches).