A row is brewing between Independent Insurance liquidator Pricewaterhouse-coopers (PWC) and brokers over commissions worth tens of thousands of pounds.
It is understood that PWC is pressing brokers to pass on gross premiums (the policy premium plus the broker's fee) generated by Independent policies.
But brokers are resisting the pressure. The Institute of Insurance Brokers (IIB) and the British Insurance Brokers' Association (Biba) are urging members to keep hold of their commissions and only pay back net premiums.
A source involved in negotiations said the liquidator had told brokers it wanted gross premiums. But he added: “PWC knows this is a grey legal area. It could be sticky.”
A letter leaked to Insurance Times from the IIB told brokers to retain their commissions. These are worth between 10% to 15%.
The letter also said: “Brokers should be very careful before sending any funds which might constitute client money to the liquidator without client authority, as they could be possibly be sued by their client in respect of any loss.”
It added: “Even if funds do become properly due to Independent, we strongly advocate that they should be paid net of commission.”
Biba chief executive Mike Williams said Biba had been in negotiations with PWC over brokers' commissions and that there is no legal precedent for PWC to recover the commissions.
He added: “For brokers with big Independent accounts, premiums are worth hundreds of thousands of pounds and that means tens of thousands in premiums.”
“We urge our members to resist any moves to recover gross premiums,” Williams said.
When asked about the row, PWC
said it was unable to address specific questions.
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