Insurer rejects principal status and encourages direct authorisation
Brokers will be pushed to become directly authorised as part of Royal & SunAlliance's broker compliance plan.
The insurer has now unveiled its strategy to help its brokers achieve FSA compliance. This follows similar announcements by Norwich Union and Zurich over the past month.
R&SA programme director Blyth Morris said that brokers would be encouraged to be directly authorised. "We do not want to be a principal, except for those intermediaries whose main function is not insurance, such as property management companies. As a principal we would be tougher than the FSA. We are seeking to make as many brokers as possible directly authorised."
R&SA's strategy is made up of a number of steps. The first stage will be to write to all brokers asking about their compliance issues and their plans for authorisation. Brokers will also be invited to one of a series of regional workshops on compliance and market issues.
After the workshops, in the first quarter of 2004, R&SA expects to be in a position to know whether brokers will be selling up or seeking authorisation - and if so, by which route.
Brokers will then be offered free compliance help using R&SA's in-house team.
Morris said: "We will be focusing on our key intermediaries, but it is open to everyone who wants advice. All our brokers will be invited to the seminars. The challenge for us is to make it simple for the brokers.
"By July we will be encouraging people to send in the application form. After that we will be badgering them."
Morris said that he expected 75% of brokers would want to be directly authorised.
"If brokers can't make up their minds as to what they want to do [with regard to authorisation], we will help them decide. If a broker wants to become an AR [appointed representative] we will be asking why."
Morris added: "We hope to make the broker channel more efficient. Many small brokers take an old fashioned approach. We hope to bring them up
What is R&SA's agenda? See page 13