I was interested to read of the dimissive stance being taken by Biba's Regional Broker Committee (Comment, 12 January), and your request seeking agreement.
While I cannot comment on the intermediary scenario in York, I have almost 40 years experience as a Lloyd's and provincial insurance broker in the South East.
The FSA is entirely correct to suspect that "conflict with the client or insured's interest" exists. Twice I have been in brokers that were bought out, and the placing philosophy of the new broking house was clear - transfer accounts to a specified provider as a priority.
In effect this was giving the underwriter's pen to the broker for certain categories of risk.
In one instance, this had my staff in tears, as there was little perception by them evidencing any mathematical or basic underwriting principles adopted in re-setting the level of premium or terms. Claims history was a secondary consideration. The client bank was plundered and fully exploited. The client wasn't too upset with the changes, as the rationale behind a reduced premium was seldom queried.
Bulk transfer of business remained the priority. But, was the client's interests put before all other considerations? Unlikely.
I'm not sure how such a trading philosophy could improve profitability - the only short term increase was to the appointed insurer's new business written ratio.
What has happened to the doctrine of uberrima fides? Is it now "treating clients fairly" and/or "contract certainty"?
Rob de la Hoy, FCII