It is great to see how many small brokers have survived the most difficult period in insurance history. Despite all the takeovers, agency cancellations and retirements, there could be as many as 16,000 companies still in business and likely to register with the GISC.
In addition to this, there must be several thousand highly trained insurance people, looking for a way to start up as brokers after becoming the casualties of takeovers and mergers. Insurers are reluctant to grant agencies to these people as they require minimum levels of support.
The good news, if you are one of these potential sole traders, is that the internet will be your saviour. It will mean customers will finally be able to choose with whom they wish to deal. If you are that person, you will have most of your insurance products available at the click of a mouse.
You will, however, have to join an internet network site, holding many online products and able to broke all other policies for you. This should cost relatively little, as the power of the business you place will be the lifeblood of the site.
Only recently, I became convinced of the feasibility of this concept, when my website loaded its 250th product.
My company is not the only one working on such an operation, so I felt it was time to give the little guy some hope instead of endless warnings. I have a lot more to say on this subject and would invite brokers to communicate any worries or hopes to me and I will personally answer each one.
Not a debacle
In your lead story last week, you claimed that the Insurance Brokers Registration Council's (IBRC) last days had been marred by a debacle. Well, if it is a debacle for a disciplinary committee to interpret the rules of a judicial procedure correctly, then I guess your reporter must have been right.
It is only the disciplinary committee that can make a judgment on whether a case has been brought correctly. The investigating committee has only to review the matter on whether there is a prima facie case to answer.
In the instance of Derek Wright, the investigating committee stated there was a prima facie case and instructed proceedings to be instigated. However, certain circumstances meant the matter could not proceed for a long time. It was the disciplinary's committee view, after taking advice from the independent legal assessor, that the decision was taken that the matter should be stayed.
There have been more than 2,700 IBRC disciplinary cases in the past twenty years, which have covered all aspects of the council's rules. Each case is taken on its merits and a judgment made according to the facts before the committee on the day.
To say that General Insurance Standards Council (GISC) will not protect consumers, as Robert Osborn did on this page last week, demonstrates a lack of understanding of its rules and aims.
Having joined and gone through a “monitoring” visit, I believe I speak with some authority on the practical applications of the rules. The monitor goes to great lengths to ensure you have given customers enough information at every stage, from quotation to renewal. Their visit also ensures that your staff are sufficiently competent to pass on the information and advise that the principal is running the business in a competent manner.
The rules also ensure that we regularly train, monitor and update staff's knowledge of our insurance products and the law applicable to them. Even our employees' communication skills come under scrutiny.
All of this ensures we run a professional business. This clearly not only protects consumers, but intermediaries, too.
However, one issue has not yet been addressed. The cost in implementing change, training and monitoring staff and systems is a significant one for independent operators. If you run a small to medium-sized independent, cancel your holiday.
The Quote Engine
In all my years in insurance, I have never seen the likes of it – insurance ads on sandwich bags. Yet, when I bought my lunch the other day, this is exactly what my sandwich came wrapped in. There was a Norwich Union (NU) Direct advertisement for car insurance on one side and one for home insurance on the other. Among other things, the advert mentions that NU Direct is a member of the GISC.
To make matters worse, you were asked to quote the reference “sand”, when phoning for a quote.
Does this mean that our local sandwich bar is now an introducer of insurance business and therefore qualifies for commission? Is this the kind of standard and professionalism the new self-regulator wishes the industry to convey to the general public?
Perhaps NU is desperate for business, to have sunk to these tacky depths. They should consider advertising on Andrex, then they can really clean up.
Marcus Hearn Brokers
Lowering our standards
Richard Sheik's belief (Insurance Times, March 29) that Groupama ought to be congratulated for the time and effort it has put into the GISC is rather insulting.
Has he forgotten that it was insurance companies that were solely responsible for the “failure” of the IBRC and it is those companies who will select which agencies to cancel – possibling depending on the level of support given to the GISC rather than a broker's profitability? This is exactly what happened when the Insurance Brokers Registration Act came into force.
Sheik completely ignores many brokers' belief that the IBRC standards are superior to those of the GISC. So should they be forced to attempt what they perceive to be lower standards? Sheik seems to think so.
The insurance companies are free to grant and cancel agencies as they see fit, and I remember when they did so ethically and responsibly. Today an IBRC broker is perfectly acceptable. Tomorrow, he or she will be forced to join the GISC or lose agencies.
Wrong kind of snow
I read with interest Mike Ward's article about local authorities (Insurance Times, March 22), where he reported the House of Lords ruling in Goodes vs East Sussex that the duty of an authority to “maintain the highway” did not include a duty to remove or prevent the formation of snow and ice.
The position in Scotland is radically different. Under the Roads (Scotland) Act 1984, Section 34 “a road authority shall take such steps as they consider reasonable to prevent snow and ice endangering the safe passage of pedestrians and vehicles over public roads”. There was already a common law duty to take reasonable care to keep roads free of snow and ice.
The various road authorities in Scotland, namely the local councils, have winter maintenance policies setting out the priorities which will be given to various types of road, depending on their class and use. Thus, motorways will have a higher priority than rural country roads, essential routes to hospitals will have a higher priority than roads in housing estates and so on.
Without naming cases, it appears that, to succeed, a plaintiff would have to show that:
Since the act came into force in 1984, we have fought a variety of winter maintenance cases on behalf of roads authorities. Experience shows that if a proper policy exists, it is very difficult for a plaintiff to succeed.
The Reid Cooper Partnership