According to FCA guidance, the Composite Insurance Company should explain the duty to disclose all circumstances material to a policy to:

The correct choice is that the Composite Insurance Company should explain the duty to disclose all circumstances material to a policy to Bert only if the context implies that Bert has a specific contractual or direct relationship with the insurance company that necessitates this disclosure duty.

In the context of insurance, the duty to disclose refers to the obligation policyholders have to provide all relevant information that can affect the insurer’s decision on coverage and terms. If Bert is the policyholder or an individual involved in the transaction, he needs to be fully aware of what is expected of him regarding disclosure.

On the other hand, if Henry does not have a similar direct relationship or if he is not part of the insurable interest or policy application process, then the duty does not apply to him. In insurance practice, the duty to disclose is specifically tied to those who are covered or have a vested interest in the insurance contract, which may exclude parties that are less directly involved.

Therefore, the guidance would emphasize clarity to those who are enter into the agreement and ensure they understand their responsibilities regarding full disclosure.