Transparency & Honesty within Insurance Industry

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ARTICLE TAKEN FROM POST MAGAZINE MAY 14TH 2009 PAGE 1

CILA URGES MEMBERS TO REVEAL FEES IN DRIVE FOR TRANSPARENCY

The Chartered Institute of Loss Adjusters is urging its members to disclose any payments received from contractor networks to its customers – despite previously claiming to have no knowledge of such arrangements.

The recommendation comes as part of a guidance note, which warns loss adjusters that they must be able to demonstrate they are treating both insurers and policyholders fairly when instructing their supplier networks.

In October, CILA President Angus Tucker denied knowledge of such arrangements between loss adjusters and suppliers in Post (16 October 08 p4) but claimed that such payments would be acceptable in the event that they would be disclosed.

Following publication of last weeks recommendations, Roger Topping, joint managing director of Top Mark Adjusters and a representative on the CILA council for smaller independent practices, said ‘’These guidelines are the start of much greater transparency in the payment of loss adjusters.

‘’The process will only be complete when the contractors have to tell policyholders how much they are charging for the repairs and how much of the sum will be paid to adjusters as their commission.’’

However, several major loss adjusting firms, with supplier networks in place, have claimed customers are already being informed of payments.

GAB Robins chief operating officer Mike Jones said: ‘’We see the guidance as a piece of CILA housekeeping. It is suggested that we make it clear to the customer that we will be receiving a fee but most firms have been transparent for a long time now.’’

Cunningham Lindsey risk and compliance manager Michael Burnett added: ‘’this formalises what companies should already be doing, insurers have to be clear what they are getting within their tender. Within large firms this is already in place.’’

Benedict Burke, chief executive and senior vice president of Crawford & Company UK and Ireland commented that guidance was crucial.

‘’The adoption of this guidance goes to the heart of TCF. It complies with it and indeed will assist with helping compliance with TCF though it is clearly a much wider issue,’’ he added.

In conclusion CILA president Angus Tucker denied that the organisation was concerned with the payments. He said: ‘’ We have been in the process of reviewing the Royal Charter and code of conduct and felt it would be the ideal time to issue guidance to supplier networks.’’


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