GIBC Digest – 13 March
4th May 2012
BROKER & INSURER FORUM (BIF)
progress is being made, the intention is to build on the BIF relationship with the assistance, where possible, of BIBA’s technical committees, formalising a consistent agenda going forward.
‘Register of friction issues’ will be added as an agenda item going forward and a copy of the Register will also be included as an additional paper for circulation to the GIBC prior to each meeting.
Declined Cases Agreement
This related initially to motor insurers’ “obligation to renew” if a customer was declined and subsequently unable to find an alternative market, although it was queried whether this should be extended to employers’/combined liability. It was felt that market agreement was needed and that it was incumbent on BIBA to ensure there was no market failure. G Scott to discuss further with S Foulsham.
BIBA had benefitted from a large amount of media coverage over recent weeks, including Radio Five Live, Moneybox, the One Show, Rip Off Britain, Evening Standard and Mail on Sunday. However, in order to maintain increased press interest BIBA is in urgent need of case studies, both on personal and commercial lines, to demonstrate the value that brokers provide. Any such case studies should be referred to L Forsyth 020 7397 0223 firstname.lastname@example.org.
BIBA’s 2012 Manifesto, setting out its key 2012 lobbying issues, had now been launched. Copies had been sent to journalists, MPs, civil servants etc. and BIBA is now tailoring a series of follow-up meetings to help raise the issues and promote brokers and its Find a Broker service. In particular, key meetings had already been held with Mark Hoban, Financial Secretary to the Treasury, and Lord Green, Minister of State for Trade and Investment. In addition, BIBA has written to the Prime Minister, Flood Minister and held media meetings with The Times, Moneywise and the BBC.
Business Resilience Research
BIBA recently undertook a joint research project with the Cabinet Office, demonstrating the value of having business resilience plans. The results had now been sent to the business media, by way of a press release, which can be accessed via the BIBA website in order for members to tailor and send to their local business press.
BIBA had sent its first ever submission for this year’s budget to the Chancellor and HM Treasury.
BIBA will be presenting the project Noah proposal to the Government Flood Working Group on 16 March, which includes HM Treasury, DEFRA, The Environmental Agency, National Flood Forum, FSA, ABI and others. Following extensive consultation, BIBA is also now finalising its Flood Guide.
The BIBA/ABI/Government signposting agreement, addressing concerns regarding access to motor and travel insurance for older people where maximum age limits are used, has now been formally approved and should go live on 6 April 2012, despite the Equality Act legislation having been put back until October.
BIBA’s guidance note, a copy of which was tabled, will be sent to members on 15 March. Any GIBC feedback prior to this should be emailed to G Trudgill email@example.com.
To ensure effectiveness of the signposting initiative, BIBA’s Find a Broker service must be regularly and accurately updated/maintained with information regarding the classes of insurance members can cover.
REGULATION, COMPLIANCE AND TRAINING
Financial Conduct Authority
Bills this summer are 3½% reduced in the FSA budget for the sector. The FSA had today published its Retail Conduct Risks Outlook for the year ahead, setting out the following broad areas of concern:
Consumer focus on initial premium
Products of limited value
Payment protection products, to replace Payment Protection Insurance
Financial Services Compensation Scheme
It is proving difficult for BIBA’s lawyers, Beachcroft, to find a legally water tight definition to separate insurance brokers, and consultancy firm, Oxera, continues to work on building a strong case for the proposed split.
BIBA also continues to lobby for an end to cross-subsidies, where the FSA has the following areas of concern – pensions, pay day loans and interest only mortgage complaints.
The FSCS budget for the forthcoming year is reduced from £69m to £57m. There is an increase in the number of claims coming through, with the average claim being £4k, down from around £10k.
Insurance Mediation Directive Revision (IMD)
BIBA understands that the revised Directive text will now be published as part of a ‘package’ of Directives, probably during June 2012, with the key aspects being:
A leveling of the playing field
Maintenance of the broad scope
Transparency, disclosure and conflicts of interest
Client Money/Unconditional Risk Transfer
The FSA will publish a consultation paper on changes to the client money rules later in the year (possibly September). They had planned to issue a discussion paper at the end of January but had decided to continue with face-to-face discussions with intermediaries. To help facilitate this, the FSA will be attending 10 (none minuted) BIBA Regional Compliance Forums during the spring, sitting down informally with members to outline their plans and gage the likely implications.
SCHEMES AND FACILITIES
Sanctions Checking Facility
The sanctions checking facility was launched on 4 January 2012. The back page of the next edition of Compliance Rules explains to members what to do in respect of commercial customers.
Equity Personal Lines Administration (former Boncaster scheme)
It had previously been agreed to continue with the existing Equity scheme, which has now been renamed ‘Personal Motor Management’.
Gallagher did not wish to continue with the scheme and BIBA had therefore been in talks an alternative provider. Following lengthy discussion it was therefore agreed to reject an environmental liability scheme generally, due to lack of member interest.
The current contract expires 31 March 2012 and BIBA is currently negotiating with existing provider, Barbon. An alternative proposal has also been received from Towergate, The GIBC agreed to proceed with Towergate.
Lorega/Claims Expert Limited
The preferred option would be for Claims Experts to work with Lorega, thus providing a more rounded solution. BIBA will liaise further with both providers.
The contract with Bureau had now expired. It was agreed to offer Bureau renewal but with enhanced contract terms.
Concern had previously been raised regarding BIBA’s inability to withdraw from a scheme contract in the event that a provider’s security rating went down. BIBA is currently taking legal view to amend contracts mid term with a suitable solvency clause.
BIBA is going through the process of looking at each of the IIB schemes and is currently at various stages of tender negotiations.
All scheme proposals will be circulated to the GIBC for initial comment, prior to BIBA undertaking time consuming analysis.
MEMBERSHIP & NEW MEMBERS.
Young Broker of the Year Award
The deadline for regional submissions is 31 March 2012. Regional winner submissions need to be received by K Wingrove no later than 14 April 2012. Scot Grimmer, CII, is an additional judge for this year. Further information is available via the BIBA website.
This year’s event will see the largest number of seminar/fringe sessions ever held at the national conference – some 18 in total. Members should register for the event online before 8 May to benefit from complimentary lunch. .