Brokers urged to sign up to transparency pledge

Brokers are being asked to pledge support for a new transparency charter.

The move initiated by the Federation of European Risk Managers Association (Ferma) is designed to create transparency in fees and commissions.

Ferma president Thierry van Santen told Insurance Times that brokers who signed up showed support for disclosure of remuneration fees paid, disclosure of any financial links with the insurer, and keeping the client informed of all new terms and conditions.

He added that reinsurers would also be invited to sign the charter.

Van Santen said Ferma had met strong opposition when it first approached the market on transparency five years ago. "But after Spitzer the market was ready to take hold of this issue."

The charter has been sent to Marsh, Aon and Willis where it is understood to have been approved.

But Van Santen said smaller brokers were reluctant to add their names to the charter.

"We have decided now that the charter will be proposed and we will circulate the names of those who have said yes publicly," Van Santen said.

An industry source said: "Ferma is of the view that new rules are needed. It believes this is an international issue which needs to be sorted out."

One leading broker who has seen the document said it was "confusing".

The broker said: "The charter is with our lawyers at the moment. We will see what they have to say and then we will consider signing up."