Insurance intermediaries will have to change the way they do business, from next month, to adhere to the new code of conduct issued by the Central Bank. Clients of individuals and firms selling insurance and investment products will be in a stronger position under the new regulatory regime controlled by the bank.

The changes will mean more paperwork for consumers to wade through in the early stages of contact with the intermediary.

Under the new code, an intermediary has to draw up its terms of business and ensure that each client is given a copy before any business is done. The terms of business must include:

a description of the services that the intermediary provides;

a statement of the basis on which the intermediary is to charge for its services;

details of the commissions structure, if any, through which the intermediary may be remunerated;

a summary of the firm's complaints procedure;

confirmation that the intermediary is a member of a compensation scheme, and the nature and level of protection available from such a scheme; and

a copy of the firm's Statement of Authorised Status.

This is a considerable amount of information to absorb but it is very useful and should be read to establish who you are dealing with.

The Statement of Authorised Status refers to the category of intermediary. There are now two basic levels of authorisation - authorised adviser and restricted activity investment product intermediary. Authorised advisers are the closest the Irish market has to independent financial advice. These firms or individuals are authorised to give broad-based financial advice, although in practice they may just concentrate on selling.

Restricted intermediaries are only authorised to sell the insurance and investment products of companies from whom they hold letters of appointment. That can be any number and give a good span of the market but it still does not cover all the options. Authorised advisers have the advantage of being free to sell and advise on the entire market. This is significant because some providers, such as Ark Life and Quinn Life, do not sell through intermediaries.

But if authorised advisers are sending clients direct to companies that do not pay commission to brokers, they will have to make money somehow. It is likely that more authorised advisers will be offering fee-based advice, under the new regulatory regime. A service that is not sales- and commission-driven should provide the best deal for consumers.

Providing the terms of business to clients will not be too onerous for intermediaries because one size fits all, but there is another statutory obligation that will prove much more demanding - the statement of suitability.

Before recommending a transaction to a client, an intermediary will have to "take all reasonable steps to ensure that the client understands the risks involved". This includes providing the client with a statement of suitability, covering the reasons why a particular transaction is considered to be in his or her best interests. This will be an important record of the basis of any advice given should a dispute arise.