Having recently been admitted as a member of the General Insurance Standards Council (GISC), my firm of brokers is now struggling with various procedures. One of these is that for private clients, of which thankfully we have few. The other is the “cooling-off” period for taking out insurance. This rule allows customers to cancel their insurance within 15 days of taking out the policy, without any reason.
In respect of the first procedure: Is there a definition of private client?
We transact the insurance of a company where we also arrange personal contracts for the company secretary or managing director. I assume they will probably be described as private clients, but others may have a different definition.
Secondly, although we have written to several insurers about the cooling-off period, we have received only one reply. This is despite insurers' constant assurances that they will deal with correspondence within seven days.
That one reply came from Axa, which quite definitely stated that it would not allow a cooling-off period, even though it is a GISC member and presumably has to comply with the same rules as we do.
Or perhaps we are entering a period of dual pricing and dual standards?
Are brokers expected to agree to a 15-day cooling off and then foot the bill for short-period rates and any other charges the insurers wish?
We would be most interested to hear from the GISC how it intends to deal with Axa's direct sales, where it has said it will not offer a cooling-off period.
Furthermore, we would like to know how we should treat this ruling in future, particularly as we have never had a cooling-off period in general insurance in the past and do not know how each insurer will react.
Incidentally, under life and pensions contracts, which we transact, the cooling-off period applies to all contracts and is not a charge against the independent financial adviser.
Edward Jones FCII
Edward Jones & Associates
A fine mess
I feel that I must take you to task over your Backchat item, Pardon me, it's not fair cop (Insurance Times, April 5), in which you implied that motorists could avoid penalty points on their licence by overpaying a fine and then failing to cash the refund cheque sent to them.
You suggested the penalty points would not be applied until the financial transaction was completed, and this would never by the case if the refund was not cashed.
Firstly, it is irresponsible to encourage or lead people to believe that they can escape their just desserts by playing the system.
Secondly, the information should have been verified. It is, in fact, incorrect, and this has been confirmed to me by the clerk to the Justices at my local magistrates' court.
If a person overpays a fine, the refund will be sent to them, but the endorsement of their licence, and acknowledgement that the fine is paid, is not dependent on the refund cheque being presented.
If the fine is not paid, the licence is still endorsed, and the court will take steps to ensure fine payment.
As a magistrate, and registered insurance broker, I thought I should clarify this point.
Name and address withheld
Over and out
The Insurance Brokers' Registration Act was repealed on April 30 and, as chairman of the Insurance Brokers' Registration Council (IBRC), I would like to thank each one of you for your support during difficult times.
Twenty-four years is a long time in insurance broking and I can well remember the feeling of euphoria when the act was passed. In the event, however, its restrictive working caused frustrations and prevented the IBRC from easing some of the more bureaucratic procedures.
Following the government's decision to repeal the act, we were confronted in October 1998 with the resignation of 11 members of the council. Six of the elected brokers decided to battle on to ensure a professional closure, confident of continuing financial support from the broking community.
That confidence was justified by the continuing support of 90% of broking interests.
To compound the problems, we were obliged to invoke the indemnity and grants scheme, which produced a virtual 100% support and a final fund of £440,000. This money is still being distributed to members of the public who have sustained financial losses.
Over the past months, the broking community has, in effect, continued to discharge all its responsibilities and enabled this council to meet the government's requirements in a controlled and professional manner. There is no longer an obligation to send in accounting or professional indemnity's documentation to the council, however.
On behalf of all council members, I would like to express our sincere thanks for your magnificent support, which encouraged us to discharge our final responsibilities. It is with regret as I sign off as IBRC chairman, but in doing so, I would like to offer you my best wishes for the future.
Chairman of Council
Tony Cornell's article on winning new business (Handy selling points, April 5) contained some useful points, but was misguided in one key area – the nature and importance of client relationships.
Cornell says the most successful brokers always have a team of sales people dedicated to new business and once business is won, it should be handed over to a services team.
In my years of experience, most clients really dislike this approach. They are courted by a smooth-talking sales person, with whom they build a relationship, only to be dropped by them once the business is won.
This reminds me of the story of the Devil, who once courted a dying man with the promise of wine, women and song if he should come to him upon his death. Once the man died, he entered hell and found none of the aforementioned treats.
The man asked: “What happened to all those wonderful things you promised me?”
And the Devil answered: “Oh, then you were a prospect and now you are a client.”
I think that says it all.