News Details

18 Dec, 2008

FS08/7 - Commission disclosure for Commercial Insurance Transactions

Looks like the FSA are giving the Industry a "final chance" to put their houses in order regarding commercial insurance commission disclosure.

The FSA first raised concerns back in 2005 and so the development of an ‘industry solution’ is the culmination of three years work.

The industry solution needs to consider :

  • A greater prominence to the customer’s right to ask about remuneration;
  • A better description of the breadth of searching undertaken on the customer’s behalf;
  • A better description of the capacity in which the intermediary is acting; and
  • The existence of others in the distribution chain where firms utilise the services of others.

Issues such as "conflicts of interest" also need to be addressed by this "Industry Solution".  If the Industry fails to meet the expectations of the FSA then we can expect significantly more draconian measures being forced upon the Commercial General Insurance Sector in 2010.

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