Dealing with secondary intermediaries can raise some difficult issues. A large number of brokers have been raising concerns about the actions of the property managing agents (PMAs) that they deal with.
PMAs are trying to avoid regulation by becoming the company secretary of the residential management companies or property owners that they deal with. This will enable them to conduct their business through the insured business as a customer rather than as an intermediary, thereby falling outside the scope of regulation.
While technically this course of action is allowed, the FSA is concerned that these actions will give rise to a conflict of interest which will be difficult to avoid. However, there is a way round the problem, as Steve White of Biba describes in our Q&A below.
One point to bear in mind is that to avoid a conflict of interest, it will be difficult for the PMA to continue to receive commission while acting as a company secretary. However, it is not uncommon for PMAs acting in this role to receive an agreed company secretarial fee.
Also this week, Mark Payne of intermediary Policy Administration Services (PAS) describes how the company is helping its retail partners with compliance. PAS arranges mobile phone insurance for group companies and business partners. This will involve taking on a large number of appointed representatives. Brokers should find his comments helpful.
Michael Faulkner
If you have received a minded to authorise letter, email:
michael.faulkner@instimes.co.uk
