We were puzzled on reading the comments by Grant Ellis of the Broker Network (Insurance Times 18 March 2004) of the problems likely to be encountered by existing IT systems faced with the FSA requirement for separate accounts for client and insurer monies.
Although I recognise there are many systems out there that do not offer this facility, Morning Data's Direct & Reinsurance system NOVUS copes with the required separation of monies into different accounts with no problem. (Unfortunately we cannot do anything about double bank charges!)
We also include facilities to cope with other FSA imposed issues, such as the movement of brokerage within 25 days of receipt of premium, claims notification within five days, exploded markets on cover notes and segregation of regulated and non-regulated business.
A much thornier problem for brokers and software houses alike is the bizarre requirement for only realising monies when they are actually credited into a broker's account. Any company with experience of international business will know that clearance times for cheques are impossible to predict.
Unless banks can be prevailed upon to contact their customers (at no extra charge) to inform them of each and every cheque credited to their account during the course of that day, this problem is likely to be hard to overcome.
London Market brokers may find this to be less problematic as a lot of their credits are not via cheques, and those brokers fortunate enough to have cleared funds information as part of their internet banking will also find it less of an issue - but this service is far from universal. A direct feed of cleared credits into the system's cashbook would alleviate this problem.
Morning Data Ltd
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