IIB saviour of brokers who don't want GISC

IIB saviour of brokers who don't want GISC

I feel that I must respond to Biba's Mike Williams's letter entitled “The facts for GISC speak for themselves”, (Insurance Times, January 11).
I totally agree.
In fact I am utterly amazed that a body such as Biba, which purports to represent brokers' interests, is actively encouraging its members to join the General Insurance Standards Council (GISC) and sign the following wide-sweeping legal waiver on the GISC application form:
“In the absence of bad faith, GISC shall not be liable in damages for any loss, cost, damage or expense which arises from any act or omission of GISC in the discharge or purported discharge of GISC's powers or obligations under the rules or in the pursuance of any of its objectives, whether arising from negligence, breach of contract or otherwise. Nothing in this paragraph shall limit GISC's liability for fraud or death or personal injury caused by negligence”.
In short, GISC can negligently put a broker out of business, but that broker has completely waived his usual legal rights to seek damages in the courts.
Just as one simple example, under the proposed infamous GISC Rule F.42, the GISC auditors could, following a monitoring visit, issue a report which culminated in all insurers withdrawing agency/terms of business agreements, forcing a brokerage into bankruptcy/liquidation. They could be negligent in doing so. But the destitute broker has no redress.
In my opinion, anyone who signs a GISC application form that contains this clause, is not being prudent at all, to put it generously.
The Insurance Brokers' Registration Council (IBRC) has no such immunity, which is why it has always dealt with breaches of the rules in a most responsible manner, openly in public, with full legal advice and support.
Under the Financial Services Act, the Financial Services Authority (FSA) has a statutory immunity, again, in the absence of bad faith, which means, that the FSA, can be totally incompetent and negligent
but completely immune from equitable Independent Financial Adviser action.
To my mind, this is wrong, very wrong, and flies in the face of natural justice. I would strongly advocate such immunity being withdrawn.
Unlike the FSA, the GISC has no statute.
It is an un-elected, self-styled, unaccountable, self-regulatory body, trying desperately to gain members by way of intimidation – yet it insists upon legal immunity from the very members it seeks to finance its lavish operational budget.
It is my opinion that the entire GISC rulebook is full of serious flaws, detrimental to the interests of the insurance broking profession and that they should not join. I am taking an enormous amount of flak in the furtherance of passionate beliefs, aimed solely at protecting the professional insurance broking community that I continue to serve, while adequate support exists.
The GISC's recent consultation document on the subject of corporate governance demonstrates all the hallmarks of a very unhealthy cartel. Indeed, I would go as far as saying that it is not a consultation document at all, as the result of the exercise has already been decided:
a) Weighted voting rights in the favour of the big industry players
b) Keeping independent board member representation in a minority position for the foreseeable future (against the wishes of the National Consumer Council)
c) Not holding board elections for some time and, then only on a “drip” (keep control) basis.
Mike Williams and George Nixon of Biba can say what they like in support of the GISC, funded with members' money without even holding an Extraordinary General Meeting. Personally, I think that they are doing the profession an enormous disservice – including their complete failure to point out the fundamental flaws in the proposed GISC regime.
The reasons I left Biba fourteen years ago (as a founder member) and formed the Institute of Insurance Brokers (IIB) have not changed.
IBRC mark II is going ahead, whether Biba likes it or not and, will provide consumers with far higher standards of professional expertise and protection than the GISC even understands or could ever hope to deliver. From our research, the vast majority of Biba members agree with our entirely honourable stance in this matter.
Last week, Direct Line placed advertisements in the tabloids saying, “we don't pay rip off commission” – neither, I might add, did the Equitable Life. Direct Line has a board position on the GISC – why, I ask, should they have a say in broker regulation?
Ultimately, brokers will vote with their feet, and that is the choice I intend to deliver.
This week we commence the completely democratic process of inviting individual applications to the new register, which will be followed by proper elections.
I will conclude by saying, that had it not been for the IIB, all brokers would have been forced into the GISC by now, whether they like it or, not and, despite all the entirely relevant and true observations made in this letter.
Andrew N. Paddick,
IIB director general.

Missing the point

Re: Mr Scaife's letter (IT, January 11).
I can tell him that the abolition of driving other cars (DOC) was on the same agenda that saw the end of Blanket Certificates. The issues had both been raised by Association of Chief Police Officers as impediments to the police in clamping down on uninsured motorists. At the time the consensus was that the Blanket Certs were a bigger problem and they pulled the short straw.
However, I think Mr Scaife is missing the point if he is asserting that DOC or the UK system of insuring the driver were the reason why windscreen insurance disks did not go ahead. Admittedly, they were important reasons, but overall, the industry could not see the logic in replacing one paper-based solution with another one. With modern PC equipment, it is very easy to reproduce official documents. There already has been correspondence in this column to this effect.
Also, I think we will find that there is provision in the database to cater for DOC cases.
One last point: Mr Scaife seems to be under the impression that DOC is only provided under comprehensive policies. In my experience DOC is a feature of the third party section of a motor policy cover and is present irrespective of whether the customer chooses TP, TPFT or comprehensive.
Roy Rodger FCII
Motor Insurance
Consultancy and Training
07931 511 258 (mobile)

Greedy goose

Re: Voluntary Compulsion (IT, January 11)
Mr Mantel thinks I have missed the point and while I do not agree, let us move on.
Scattered among his criticisms of the IIB are suggestions that they may be pursuing some form of “compulsory voluntarism”, with which he disagrees.
Even if this is the case, how can it be wrong for the IIB to follow this route, and yet right for GISC to use similar criteria? Why should the goose have all the sauce? Probably because he is bigger and stronger than the broking gander and would like the farmyard all to himself.
GB Jones
Vale Insurance Brokers

Naming misfortune

The news that the Post Office is changing its name to Consignia prompted me to ponder possible changes of name for some of the insurers with whom it is my misfortune to deal. On this pseudo Latin/Greek theme, how about the following?
Schizophrenia – for the insurer who operates a dual-pricing structure (never in my favour).
Ad Infinitum – for the insurer who keeps me waiting on the telephone while playing mind-numbing music. Anonymous – for the insurer who says I must deal with four different branches depending on the class of business.
Illegitima – for the insurer who continues to cut my commission levels.
In Utero – for the insurer who answers the phone promptly, offers competitive premiums, employs knowledgeable staff and backs it all up with efficient service... it hasn't yet been born.
Martyn Ingram FCII
Chartered insurance practitioner
Norris & Fisher

Bucking the trend

I read with interest your front-page story “Axa brands low class brokers (IT, January 4), and I would hope that those brokers with smaller volumes of business view this development in the context of the services that are available to them from insurers such as MMA Insurance.
As a specialist player in the industry with a growing portfolio of very successful niche commercial products, our approach differs from that of larger insurers.
Since the launch of our customer service standards last year, we are committed to providing first-class support to all our agencies, irrespective of size. We would be delighted to talk to any broker with commercial accounts, about an agency arrangement that delivers stringent service standards, dedicated feedback and support services including free product and marketing training.
If there is a move away from supporting and servicing smaller brokers, MMA Insurance, as a broker-only insurer, is happy to be bucking the trend.
Karen Owsley
Marketing & communications manager
MMA Insurance