The package on offer seems attractive, but there is a clear agenda behind it, says Andy Cook
Royal & SunAlliance (R&SA) is the latest insurer to reveal how it will help brokers to comply with FSA regulation.
Along with NU and Zurich, and to a certain extent AXA, R&SA is providing compliance consultancy on a wide-ranging basis from simple healthchecks to on-site visits. But the big difference is that it is all free. NU and Zurich are providing some services for free to everyone and some of the more cost intensive advice is available free to top-tier partner brokers but at a cost of a few hundred pounds to smaller agencies.
The key to this act of generosity from R&SA is that the work will be all undertaken in-house - which for many brokers could be as reassuring as it is worrying. After all, do you really want your insurers to know absolutely everything about the way you work.
The other key issue emerging from the R&SA announcment is its attitude to appointed representatives - that's where R&SA would take on compliance responsibility from its agent. R&SA is doing as much as it can to avoid beoming the principal for third party agents - even where it has a substantial financial stake.
In essence, if you are a general insurance broker then R&SA will not become your principal. Even if selling general insurance is secondary activity, R&SA will have reservations about becoming the agent's principal.
Even if you can persuade R&SA to take on your FSA compliance responsibilities, it has promised to be tougher than the FSA in regulating you. The message could not be clearer.
Wholesale brokers it seems are set to seize the opportunity. One of the biggest wholesale brokers in the country last week told me that it sees becoming a principal as a big opportunity and that it will be actively marketing schemes on this basis. It creates an interesting alternative and one that many vets, garages and other businesses that sell insurance as an extra would welcome.