I was fascinated to read the letter from Chris Woodburn and John Parker in Insurance Times August 10, and linking this to Simon Bolam's reported stand on p3, something has to be said.
The underlying role of a regulator is to seek to prevent a member of the public being harmed financially. The extent of that harm is another debate altogether, but in aiming to achieve this end, there are only two states of being: compliance and non-compliance and within that, competence and incompetence.
The first stage in any regulator's life is to enforce compliance and competence, not “very good compliance” or “very competent”.
The intellectual and practical task that faces a regulator is setting standards that meet those criteria across – in the General Insurance Standards' Council's case – a wide range of insurance providers and points of sale and advice.
A trade association or professional institute, on the other hand, is free to set whatever standards of excellence it expects of its members. In that regard, the fact that the Association of British Insurers requires a higher standard than the regulator on any matter is entirely for them and a decision that is totally harmonious with a regulatory framework.
Regulation is about setting minimum acceptable standards to protect the public and enforcing them.
That a trade association wishes to move
to a higher standard should be encouraged.
Mike Williams of British Insurance Brokers' Association has suggested that the competence requirements of GISC are too low. One has to pose the question: “Too low for what?” Protecting the public or being a member of Biba. The fact is that these are two different standards.
Personally, I feel that there must be support for Simon Bolam's suggestion that actions and edicts of this nature by trade associations will muddy the waters – but only for a relatively short period.
It is clear, (with one notable exception that seems to veer towards a paranoia), that trade bodies and professional institutes believe that the public are best served by a higher standard than just good practice. This must be encouraged, but I do think that the industry will be best served by working together and establishing an underlying compliance culture before driving members of trade bodies to higher standards of excellence.
There is no conflict between GISC and the ABI. The ABI should not be discouraged from setting higher standards for its members than those set by the regulator, any more than Mike Williams should be discouraged from wanting higher competence benchmarks for Biba members.
If their members don't like it they will vote with their feet.
My view is that the timing of initiatives
of higher standards is poor and that as an industry we should work together to get the underlying house standards in order first.
The critical, and dare I say unpretentious factor, that governs good regulation, is that the public can buy general insurance safely and from people and companies that care.
I reckon that as an industry, we could make a pretty good go of that and from an independent perspective, I believe GISC has a good grasp of what is needed. Let excellence flow from the underlying minimum standard of good practice.
Dare I say that if someone tells you otherwise, you may be talking to someone with ulterior motives or maybe they are simply paranoiac.
Robin Wood

Write way to look at it
I refer to the very well written article by Jack Hurst – Keep it ticking over – Insurance Times August 17.
All that Hurst says echoes our thoughts on business interruption cover. As one of the largest firms of claims handlers in the UK acting for the insured, we are astonished at how many claims are underinsured, or do not have an adequate indemnity period. This is due to, as Hurst says, a lack of understanding of business interruption, in particular by brokers/intermediaries who are advising the insured.
Henry Harris
Harris Claims Group

Skirting the issue
I am sorry but Tony Cornell has not addressed the questions raised in my letter, he has merely skirted the issues with diversions. I agree that the accounts of limited companies are available for all to see and presumably he checked them all personally – if not, who did? He made sweeping statements about “brokers” without qualifying that he meant corporates only and yet we know that a large number are privately owned, so what about them? At no time did I suggest the IBRC had released information to him and it appears to me that he is avoiding the issues I have raised.
It is a very serious matter when 3,500 corporates are told they are likely to disappear within the next five years without any factual support of such a statement. All I have asked is that he supports his original article with details and facts. Is that too much to ask, as surely he has the information on which his article was based?
Brokers and intermediaries want facts please Mr Cornell and so I stand by my original letter and ask that those facts are revealed. When they are, the industry may be able to have the “well presented argument” that has been proposed.
Anthony Hall ACII
chartered insurance practitioner
and insurance broker

Missing the point
Re: the Buchanan Campbell letter, August 24.
The article to which your correspondent refers (Insurance Times July 27, p22) was hardly comical in that it told the exciting story of a highly successful and well-regarded business – one that is now fully listed on the London Stock Exchange with a market value of more than £500m.
The comments in the article on Claims Direct's chief executive and founder, Tony Sullman's principles are entirely consistent with the strong business ethics that Claims Direct demonstrates in its dealings with claimants every day. Your correspondent has clearly either misunderstood or misinterpreted Claims Direct's business procedures.
Quite simply your correspondent misunderstands the differences in operations of the law in Scotland and England/Wales, the fact that we do alert claimants to alternative funding methods, that the claim is not assessed or the client advised by persons with no legal training and that Claims Direct believes that training is vital for best practice, and benefits solicitors themselves. Indeed your correspondent should remember that because all solicitors are regulated by a professional body, all our claimants are well protected.
However, we fully support his suggestion that Insurance Times should undertake ‘an objective study of after the event products' because we believe that it will conclusively demonstrate that Claims Direct's policy is the best value on the market for the superior coverage it provides.
Claims Direct

Bar code brokers
So Tesco is now planning to sell insurance like baked beans. Simply scan and put it in with your frozen peas and loo roll.
Surely Insurance Times should be taking a more critical view of this approach rather than simply copying the press release verbatim.
How about asking the ABI for their comments. Travel agents, tour operators, brokers and telesales operations are obliged to follow the ABI rules on the selling of travel insurance. It's hard to imagine Tesco's management (nor those waiting in the queue) accepting the delay while the person on the till draws to the attention of the insured the ins and outs of excesses and health conditions etc. So they won't.
Isn't it time that the ABI got tough?
Aubrey Abbott
Voyager Insurance Services Ltd

Don't get caught short
I was very interested to see your article ‘Newcastle fans left £35,000 short' in Insurance Times August 3rd.
First Legal Indemnity is a provider of after-the-event litigation costs insurance, although is not the insurers in the Newcastle case.
As with any other class of insurance people should not to be underinsured.
I noted the comments of Jane Duffy, one of the Newcastle fans involved in the action, in particular her fear that: “The other side knows from the outset how much cover the defendant has and can slap in bill for a total sum of that cover.”
The Civil Procedure Rules specifically provide for that situation to happen. The Practice Direction, introduced in July, specifically states that there is no requirement to specify the amount of the premium nor the amount of the cover until such time as you seek to recover the premium from the other side.
There should not be any way in which an opponent can find out the amount of the cover and alter his bill accordingly.
The notification requirement on Form N251 does not require disclosure of the amount of the premium or the level of the cover to an opponent.
As this is relatively new area of insurance it is very important that people are not confused about such matters.
Bernard Clarke
Underwriting Director
First Legal Indemnity

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