The unfortunate demise of Independent Insurance highlights one of the most serious deficiencies of the General Insurance Standards Council (GISC) in their role as regulator, and therefore guardian, of the insurance buyers interests.

The failure of any insurance company is the worst possible scenario to be faced by any regulator and it must beg the question: what action could GISC have taken (in its present form) to have provided protection to the consumer in this event?

The answer of course is nothing, and equally GISC is powerless to prevent or take any action against intermediaries who, in the last three months, have placed any new business with, or recommended renewal of Independent Insurance to their clients. Such actions could clearly be construed as a negligent act possibly evoking a claim on their professional indemnity insurance.

As I have stressed before, the point behind these apparently mindless ramblings is that the industry is fooling itself if it considers that GISC is in place to protect the consumer. GISC will have no power whatsoever to control the actions of an insurance company board, which may result in a scenario not dissimilar to the Independent situation.

It does, however, have the power to force an insurance broker out of business at the stroke of a pen.

To be a viable regulatory body, the rules must be seen to be equally applicable to all distributors of insurance products but quite clearly they currently are not.
R H Osborn
Director, Castlebank Brokers

Loss recovery cover ‘entirely new'
Chris Wait is wrong to say that our loss recovery insurance is not new. He makes a number of claims in his letter in last week's Insurance Times (June 21) concerning our advertisement for loss recovery insurance that I feel I must correct.

Firstly, he says a number of other companies, including his own, have been selling this type of cover for a number of years. While others may have been providing a simple indemnity cover for loss assessors' fees in the past, the Loss Recovery Group has developed a product that offers brokers a complete claims consultancy package triggered by insurance.

Our loss recovery insurance includes an indemnity cover together with access to a nationwide network of qualified independent chartered loss adjusters. A support team in our offices then monitors the entire claims making process reporting back to the broker on each claim.

The combination of cover and central coordination, together with the use of chartered loss adjusters, is entirely new, having been launched by the Loss Recovery Group in 1986.

I also have to take issue when it comes to Mr Wait's comments about the use of “It's what the industry has been waiting for” in the advertising copy.

Our own research shows that brokers value the involvement of independent chartered loss adjusters, over and above loss assessors in the claims process, seeing this as an important extension of the service they offer their clients when a claim arises.

The fact that the costs of the claimant's own adjuster are covered as part of the same package makes it even more of a valuable service.
Malcolm Harvey
Managing director, The Loss Recovery Group

Setting the record straight on e-commerce
I am writing to set the record straight, following your article entitled “E-Commerce unit closed” (Insurance Times, June 21).

We recently conducted a review of all our activities to ensure that we continue to provide the best possible service for our members. This review identified some areas where members' needs can best be served by transferring the function to a third-party provider.

This is exactly what has happened to the work of the e-commerce team, whose activities, as your article says, were mainly in the technical area of electronic trading standards. Service to members will be maintained by the new provider, Polaris.

The ABI continues to give e-commerce a very high priority. It is a major preoccupation for several of our main policy departments and we keep in close touch with developments in Whitehall and Brussels.

Your article also mentions the fraud team in our general insurance department. ABI is giving a higher priority to anti-fraud work and recently made an excellent new appointment to the post vacated by Paul Crake.

Debra Weekes, formerly of our life and pensions department, will take over this crucial area in July. She will have staff support and will be working with a new committee of member companies that will take a strategic view of all fraud issues as they affect the industry.
Stephen Sklaroff
Deputy director general,
Association of British Insurers