Compliance to see brokers linked to specific insurers, experts say
Some brokers are bound to become tied agents to insurance companies following the introduction of broker regulation in 2004, according to AXA and Zurich representatives.
Speaking at the Insurance Times round table on compliance, AXA and Zurich's compliance managers said they expected to see tied agents - advisers selling the products of a single company - to become a feature of the industry within a couple of years.
Dave Smith, head of operations for Zurich UK's commercial business, said: "We expect fully tied agents to become the norm over the next two to three years."
AXA compliance manager, Collette Jolly agreed. She said: "It is also likely that tied agents will be the way forward. We back this approach. Although a range of possibilities are open at this stage."
Chief among the panel's other concerns was criticism over FSA demands for intermediaries to be covered by professional indemnity (PI) insurance.
Broker Stuart Alexander's joint managing director, Stuart Reid, claimed the industry might be unable to cope with the stampede for cover.
Compliance Solutions managing director Gary Dixon echoed a recurring theme, warning that the uncertainty surrounding appointed representatives was damaging small brokers' compliance efforts.
The comments were made at a compliance round table held in association with Citigate Technology. Read the round-table report in next week's Insurance Times for an insight into the industry's experience of coming to terms with FSA regulation.
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