IIB refers R&SA's terms of business to the OFT for failure to include a non-solicitation clause
The IIB has this week referred Royal & SunAlliance's terms of business agreement (TOBA) to the Office of Fair Trading (OFT).IIB director general Andrew Paddick has officially recommended to brokers that they do not sign the R&SA TOBA, due to its failure to include a clause preventing the insurers from approaching clients direct. Paddick said that this recommendation constituted a notifiable agreement under the provisions of the Competition Act, overseen by the OFT.He said that to date the institute had received support from over 400 brokers, with the vast majority agreeing to fund legal action if required. Paddick said he would only look to broker funding if the OFT condemned the recommendation. But talks between the IIB and R&SA are continuing and Paddick said he hoped to settle the matter amicably. R&SA UK commercial director Brendan McManus said: "We're not going to engage in conversation with Andrew via the media. If any broker wants to discuss our TOBA they should contact me direct."A market source said that several brokers had already signed and returned R&SA's TOBA.In a letter to brokers, Paddick said the institute's notification to the OFT would include making a similar recommendation against any other insurer who failed to include a suitable non-solicitation clause in its TOBA. AXA head of broker development Colin Caulder said the insurer was drafting its new TOBA, and intended to issue it in mid-August. On the issue of client solicitation, Caulder said AXA would "subscribe to the ABI/Biba/IIB recommended TOBA".Biba chief executive Eric Galbraith said he was also in discussions with insurers over their TOBAs. He said: "I thought it had been resolved with regards to the [ABI/Biba/IIB] heads of agreement. It's disappointing."
Quinn-direct TOBA leaves insurer poised to snatch brokers' clientsMore than 150 UK intermediaries have signed TOBAs with new entrant to the UK market, Irish insurer Quinn-direct. Its UK TOBA, obtained by Insurance Times, contains the following clauses on client solicitation: