The news that the ABI and Biba are developing compliance templates (23 October, Insurance Times ) is to be applauded.

It was inevitable that such a development would occur. Following this year's CII conference, Sarah Wilson, who heads up the high street firms division at the FSA, left brokers with concerns with the announcement that the regulator would not provide any templates. It was up to the industry to provide its own solution, she said.

The existence of templates must not make brokers complacent. Each business is different and a standard document cannot cater for all firms. Brokers need to view templates as a starting point.

In the coming months there will no doubt be pressure from brokers to examine agency agreements and develop standard terms. Biba has already expressed a desire to look at these.

But any moves to develop a standard agency agreement would be fraught with difficulties. The agency agreement is a powerful tool by which insurers can segment their brokers, providing better terms to favoured firms. Not only that, but every insurer has different terms upon which it appoints its agents. Given that, it would be almost impossible for insurers to agree on what is standard.

Michael Faulkner

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