Can a car dealer sell GAP insurance as our appointed representative?

Yes. GAP is a general insurance contract, and an AR may arrange and advise on general insurance. ICOBS 6A.1 applies when GAP is sold with a vehicle by the firm or its AR: the dealer must give the prescribed information and wait at least two clear days, unless the customer starts the sale sooner and confirms they understand.

When can a new AR start selling insurance?

Not until it appears on the Financial Services Register for insurance distribution (SUP 12.4.9G). Notice of a new AR must reach the FCA at least 30 days before it starts, and the principal must check good repute and close links before appointing it.

Do our ARs’ staff still need 15 hours of CPD a year?

Not for general insurance. PS25/21 removed the fixed minimum from 9 December 2025. Firms must still make sure staff have the knowledge and ability their role needs, and the 15-hour minimum remains for long-term insurance.

Are we responsible for what our ARs earn in commission?

Yes. As distributors under PROD 4.3, firms must consider their remuneration and its effect on value. The FCA found many distributors failing to do this in 2024, the same year it paused GAP sales over commission of up to 70%.

Does a retailer selling a warranty need to be our AR?

Not always. Some low-premium cover sold with non-motor goods or travel services is excluded, if it costs €600 a year or less and meets the other conditions. Cover outside the exclusion needs authorisation or an AR appointment, and the exclusion never applies to motor goods.

Industries

General insurance

Oversee the outlets that sell your cover

For insurers, brokers and MGAs whose ARs sell home, motor, travel, GAP and warranty cover alongside the business they are known for.

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Upcoming work

Scheduled across your network

Quarterly complaints

Collecting returns

Annual Fit & Proper

Individuals invited

Annual review

Preparing evidence

Fewer ARs, the most revenue

General insurance AR numbers have fallen for years, but the sector still earns more regulated revenue through ARs than any other, much of it from outlets whose main trade is something else.

general insurance and protection ARs in March 2026, down from 11,916 in 2021: 6,816
regulated revenue through those ARs in 2025, the most of any sector: £4.0bn
of GAP premiums paid out in claims, when the FCA paused sales in 2024: 6%

The rules that matter in this sector

On the Register before the first sale: An AR may not start insurance distribution until it appears on the Register, and the FCA must be told before an AR first starts it (SUP 12.4.9G, SUP 12.7.7AR).
Good repute and close links: Before appointment the principal must check the AR's good repute, including no serious financial crime and no previous bankruptcy, and obtain its holders of more than 10% and close links (SUP 12.4.8AR, SUP 12.4.8CR, SYSC 28.3).
Remuneration and fair value: Distributors, ARs included, must consider how their remuneration affects the value of the product (PROD 4.3), and customers must be told the nature of the remuneration before the sale (ICOBS 4.3).
Demands and needs on every sale: Each sale needs a demands and needs test, with the statement given before the contract is concluded (ICOBS 5.2).
GAP has its own sales rules: GAP sold with a vehicle needs prescribed information and at least two clear days before the sale is concluded (ICOBS 6A.1). Since December 2025 there is no fixed CPD minimum for general insurance staff, but competence is still required (SYSC 28.2).

What the FCA has said recently

9 December 2025
PS25/21 simplifies insurance rules
The 15-hour CPD minimum for general insurance staff, AR staff included, was removed, and intermediaries may not act as lead manufacturer. The FCA said it would decide in 2026 whether to change the GAP rules.
21 August 2024
TR24/2 product governance review
Many distributors were failing to meet PROD 4.3, and most had not understood their duty to consider how their remuneration affects value.
24 May 2024
GAP sales resume
Insurers resumed GAP sales with materially lower commission paid to those selling it.
9 February 2024
GAP sales paused
Insurers covering 80% of the market paused GAP sales after the FCA found 6% of premiums paid out in claims and up to 70% paid as commission to sellers.

Between annual reviews

A new outlet is not yet registered: An AR becomes active only once its filing is approved and the Register shows it, so your team can see which outlets are cleared to sell.
Ownership changes at an outlet: Companies House is checked for new directors and persons with significant control, and each change is an issue to investigate against good repute and close links.
Commission out of line: Returns collect sales, premium and commission by product for each AR, so outliers show across the network.

What to collect from each AR

Merrin schedules these as returns, by risk tier, and puts each one with the firm or Individual who needs to provide it.

Returns & tasks

Policies sold and premium written by product line
Commission and fees received per product, as a share of premium
Complaints by product and cause, for REP025
For motor dealers: GAP information dates, sale dates and penetration
Demands and needs records and remuneration disclosures, sampled
Cancellations and refunds within the cooling-off period
Annual good repute declarations and the name of the record-keeper
Shareholders over 10% and close links, with any change
Training and competence records for staff who sell insurance

Where Merrin fits

Merrin keeps each outlet’s registration, people, returns, risk and reviews together, so your team can see the network’s sales, commission and complaints in one place.

Keep your existing systems

Quoting, policy administration, claims and premium collection stay with your insurance systems. Merrin does not sell or administer policies.

Insurance-specific returns and integrations with policy systems need to be agreed before rollout.

See the roadmap

Consumer credit is our initial focus. Talk to us about the fit for an insurance network.

Questions from general insurance principals

Can a car dealer sell GAP insurance as our appointed representative?
Yes. GAP is a general insurance contract, and an AR may arrange and advise on general insurance. ICOBS 6A.1 applies when GAP is sold with a vehicle by the firm or its AR: the dealer must give the prescribed information and wait at least two clear days, unless the customer starts the sale sooner and confirms they understand.
When can a new AR start selling insurance?
Not until it appears on the Financial Services Register for insurance distribution (SUP 12.4.9G). Notice of a new AR must reach the FCA at least 30 days before it starts, and the principal must check good repute and close links before appointing it.
Do our ARs’ staff still need 15 hours of CPD a year?
Not for general insurance. PS25/21 removed the fixed minimum from 9 December 2025. Firms must still make sure staff have the knowledge and ability their role needs, and the 15-hour minimum remains for long-term insurance.
Are we responsible for what our ARs earn in commission?
Yes. As distributors under PROD 4.3, firms must consider their remuneration and its effect on value. The FCA found many distributors failing to do this in 2024, the same year it paused GAP sales over commission of up to 70%.
Does a retailer selling a warranty need to be our AR?
Not always. Some low-premium cover sold with non-motor goods or travel services is excluded, if it costs €600 a year or less and meets the other conditions. Cover outside the exclusion needs authorisation or an AR appointment, and the exclusion never applies to motor goods.

Sources

Checked against these sources on 23 October 2026. This is general information, not legal advice.

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