TEn network boss James Sharp says that FCA review into appointed representatives (ARs) will weed out the good firms from the bad ones.
He welcomed the findings of the review, but added that in the short term it could cause insurers to form a negative view of all ARs.
Sharp said: “It was pretty much what we predicted that some people would get a pasting. I am not surprised that they found some people wanting.
“In the long term it will not affect the reputation of the good ones. If the review drives quality up that is good from all points of view.
“I just wish the firms had been named because that would end any speculation.”
Deloitte insurance partner Mark McIlquham said the results of this thematic review were consistent with the FCA’s clear focus on the insurance distribution chain and the conduct risk within it, particularly for personal lines business.
McIlquham assed: “Some distributors of insurance policies may have believed that being an appointed representative (AR) was a lighter touch than being directly regulated. This pronouncement shows once and for all that this is not the case.
“Getting comfortable with the way that a principle firm oversees its network of ARs enables the FCA to efficiently supervise a significant number of firms selling general insurance.
“The results of this review demonstrate unequivocally that ARs need to be closely overseen and monitored. Firms need a comprehensive and risk based framework for overseeing their ARs, including take on. Through ongoing monitoring, they will need to ensure that the AR is operating to standards consistent to that of the principle firm and demonstrably within its risk appetite.”