GISC goes easy on networks

The General Insurance Standards Council (GISC) has decided that it will consider applications from networks individually.

Before a network application is accepted the GISC will make enquiries regarding the applicant's general insurance activities and compare them with those undertaken by its appointed agents.

The GISC will also review the management within the network and the quality and experience of the compliance staff, together with the internal framework and procedures for ensuring compliance with the rules.

The GISC said a contribution might be sought towards the cost of a report but that it had not come to any firm conclusion regarding charges.

But it said it would consider the effect of a network gaining membership and appointing agents on its overall fee income compared with the fees that would be charged if the agents applied individually.

Networks may have to comply with additional specific requirements as a condition of membership.

Grant Ellis, managing director of The Broker Network, said the decision was very sensible. “We are very pleased that they have decided to recognise a separate category for networks,” he said.

Ellis said he was concerned that networks might be formed just to offer cheaper fees but without having the necessary infrastructure.

Ellis added that The Broker Network had had an application to join the GISC in for “a little while”.