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Intermediaries / Brokers - WARNING
foggytown
Posts: 325 Forumite
Well, I tooled around the user-hostile FSA site without much luck but maybe someone in here can give me a shove in the right direction.
The on-line insurance quoters (like confused, g0compare, elephant, yes, quoteline, etc) describe themselves as "insurance intermediaries". What's that when the spin is stripped away? Are they "brokers" by another name? To whom do they owe their standard of care? (Me? Insurers? Nobody?) If they receive commisions from the Insurers, are these intermediaries required to disclose same to policyholders?
Also, I have noticed a new trend. Some of these sites are charging an "admin fee" of up to £20 per policy and making it appear like that's all they are getting. I had a real row with Quoteline over this and they finally admitted that they were getting 24% of the premium as well as the "admin fee". I asked them if it wasn't the case that admin expenses was included in what the commisions were supposed to be for. Again, aren't they required to disclose their commisions if requested?
FoggyTown
The on-line insurance quoters (like confused, g0compare, elephant, yes, quoteline, etc) describe themselves as "insurance intermediaries". What's that when the spin is stripped away? Are they "brokers" by another name? To whom do they owe their standard of care? (Me? Insurers? Nobody?) If they receive commisions from the Insurers, are these intermediaries required to disclose same to policyholders?
Also, I have noticed a new trend. Some of these sites are charging an "admin fee" of up to £20 per policy and making it appear like that's all they are getting. I had a real row with Quoteline over this and they finally admitted that they were getting 24% of the premium as well as the "admin fee". I asked them if it wasn't the case that admin expenses was included in what the commisions were supposed to be for. Again, aren't they required to disclose their commisions if requested?
FoggyTown
42 years of experience in the insurance industry.
And nothing the industry tries do to us surprises me any more!
And nothing the industry tries do to us surprises me any more!
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Comments
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Intermediary is the correct term. Changes in General Insurance (GI) regulation a few years back removed broker status from most of us and we are now intermediaries to brokers further up the chain.
We receive our commission from the brokers who recieve it from the insurance company.Again, aren't they required to disclose their commisions if requested?
No. Investment business requires disclosure but protection and GI doesnt.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Intermediary is the correct term. Changes in General Insurance (GI) regulation a few years back removed broker status from most of us and we are now intermediaries to brokers further up the chain.
We receive our commission from the brokers who recieve it from the insurance company.
No. Investment business requires disclosure but protection and GI doesnt.
I don't think so. Maybe with IFAs that's the case, but not brokers. I was a Lloyds Broker for 25 years. Per FSA regs we certainly had to disclose our commisions to clients if requested as did every other broker I know - on any insurance placed. No, the question here is whether these on-line operations are acting (and defined) as brokers and, if so, whether they are bound to disclose their commisions.
FoggyTown42 years of experience in the insurance industry.
And nothing the industry tries do to us surprises me any more!0 -
No, they don't have to disclose their commission to you unless you are a commercial (ie business) customer.
FSA rules for intermediaries are now bundled up in something called ICOB (Insurance: Conduct of Business) and there is nothing in there to say that commission has to be disclosed to retail customers.0 -
I don't think so. Maybe with IFAs that's the case, but not brokers. I was a Lloyds Broker for 25 years. Per FSA regs we certainly had to disclose our commisions to clients if requested as did every other broker I know - on any insurance placed. No, the question here is whether these on-line operations are acting (and defined) as brokers and, if so, whether they are bound to disclose their commisions.
FoggyTown
dunstonh and fullup are right.
We covered most of this previously in this thread:
http://forums.moneysavingexpert.com/showthread.html?t=576939&highlight=commercial0
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