Brokers slam scheme for non-regulated advisers to sell general insurance
Brokers reacted angrily this week to 'introducer' schemes allowing non-regulated advisers to sell general insurance (GI).
Insurance Times reported last week that broker network Ceta had launched a scheme allowing mortgage and other non-GI financial advisers to receive commission by recommending Ceta as a provider of general insurance products.
Ceta acts as an intermediary for major insurers including Zurich, AXA and AIG.
But brokers slammed the practice as detrimental to customer's interests, and discouraging professionalism.
The FSA also warned that such schemes are "fraught with difficulties".
Principal of Cornwall-based Rowett Insurance, Glyn Rowett, told Insurance Times: "As a broker, it is frustrating to hear. We invest time and money to keep up with FSA regulation.
"If these 'introducer' schemes becomes commonplace, there is no incentive to go through the process of getting regulation in the first place.
"This undermines professionalism within the industry."
Biba regulation and compliance manager Steve White said: "This is definitely a grey area. There is fine line between suggesting the customer calls a specific broker or insurer,and actually offering advice on a specific product."
A Ceta spokesman said: "The introducer scheme is well covered by FSA regulations. Our clients are aware of the difference between recommending and offering specific advice. If they overstepped the mark, we would no longer work with them."
The FSA said it would monitor these schemes closely.