Industry ready to announce account for brokers who hold only insurer monies
Details of a new trust account for brokers handling no client money are expected to be announced within weeks.
Insurers, the ABI, Biba and the IIB have been developing the trust account to cope with the situation when brokers hold only insurer - risk transfer - monies.
AXA head of broker development Colin Calder said: "An internal document is circulating for agreement. We are working with the ABI to get a more co-ordinated position so insurers don't come up with separate solutions. We are beginning to make progress and should have something definite by the Biba conference."
Royal & SunAlliance FSMA programme director Blyth Morris confirmed a proposal on the matter had been "signed off" in January by the insurer.
Norwich Union is also understood to be involved in the discussions.
The need for a new trust account arises because if a broker holds only risk transfer money, the FSA's client money rules do not apply. Brokers must therefore hold the money in non-FSA accounts, which may not protect the money.
Biba regulation and compliance manager Steve White said: "The old GISC trust accounts no longer have trust status. If a broker held money in these accounts and went bust the money would not be protected."
White welcomed insurers' efforts to create a new trust account. He said: "The ideal scenario would be a cross-mingled account for all insurer monies."
ABI head of market regulation Chris Hannant said: "We will be taking this forward with Biba and we hope the wider insurance community will run with it."
