Insurer checks on its brokers' compliance with treating customers fairly rules
Highway is auditing its brokers to check their compliance with FSA rules.
The broker-only insurer has contacted brokers requesting confirmation that they have policies in place dealing with treating customers fairly (TCF), financial crime prevention and business continuity.
Highway is also asking for information on new business and cancelled policies over the past year, including proposal forms, inception cover notes and other paperwork.
The letter, sent last week, tells brokers they have seven days to supply the information.
Highway said in the letter: “Highway Insurance has a responsibility to ensure the suitability of its distribution channels and that our products are distributed through firms that are compliant with the FSA’s rules and principles on treating customers fairly.”
While insurers audit their broker agents, a compliance expert said the level of detail requested was exceptional. “It is rare for insurers to do more than some basic checks,” the compliance source said.
Firms will failr to meet TCF deadline, says FSA
The FSA this week warned that it was likely that many firms would fail to meet the December deadline for implementing the treating customers fairly (TCF) initiative.
Brokers must demonstrate by the end of the year that they consistently treat their customers fairly, including demonstrating that the fair treatment of customers is embedded within their corporate culture.
The FSA said in its business plan: â€œOur assessment so far, is that while many firms have made progress on building the fair treatment of customers into their culture, there is less evidence that their work on TCF is translating into improved outcomes for consumers. This suggests a clear possibility that many firms will not meet the December 2008 deadline.