Many brokers will want to go it alone to become compliant but what help can they expect from their insurer partners? Frances Higney reports
The issue of compliance has undoubtedly come as an added burden to many brokers but there are several options available to help brokers put their house in order.These include joining a network, buying in expert help or finding a white knight to take on all their woes.However, it seems reasonable that the first place brokers might look for help would be to their provider partners, with whom they have built up a working relationship over a number of years.
Taking responsibilityInsurers, for their part, have been told in no uncertain terms by FSA chief executive John Tiner that companies must ensure their intermediaries are authorised if they want to continue using them after regulation.So it is in their own interest that insurers should provide as much help to their brokers as possible in order to comply with their own statutory requirements.However, it appears that some companies seem to be taking this responsibility more seriously than others. Insurers like NU, Zurich and AXA are going the extra mile for their brokers by running workshops and seminars and striving to keep brokers up to speed with legal developments.Other companies seem content to take a back seat and are happy for their brokers to find compliance information elsewhere in the market."There is no point in duplicating what everybody else in the market is doing," points out Groupama marketing manager Jamie Marchant. "We prefer a 'drip effect' of getting information into the market -not a bucketful of detail -and try to discover where the knowledge gaps are and fill them."Groupama has attempted to plug the knowledge gaps among its broker base by adopting a third party approach -sponsoring discussions and flagging up areas of concern in the media. It's a tactic that has also been adopted by other product providers. Allianz Cornhill's communications manager Mark Bishop says: "We will work with our brokers to find solutions to the regulation issues, but we do not feel we will add any value by circulating literature which is already available from the FSA. However, we will communicate key facts and issues as appropriate, and help to support our brokers through our regional branch network."Blyth Morris is the programme director for compliance at Royal & SunAlliance (R&SA). He agrees: "There is no point in sending piles of information. We need to be explaining rather than simply writing out information.
Prime players"We are at present training 'nominated champions' who will deal with individual broker concerns at the local level."He anticipates around 500 brokers to use R&SA as their "prime player" in terms of compliance issues and he expects 75% of brokers to seek direct authorisation. Zurich has recently mailed over 4,000 brokers and to date has had a response rate of around 10% of which some 15% have still to make a decision. Other respondents seek a health check or outside support at a subsidised rate.
CHECK REVEALED GAPSAs a holder of industry standard ISO 9002 Laurie de Mel, managing director of composite broker The Insurance Group, felt confident he was ahead of the game when it came to compliance and in many ways he was. However, a health check by two members of the Zurich compliance team highlighted how wrong he was to be complacent."Our situation is complicated by having a life and pensions side, as well as a general side," he says. "We want to be directly authorised by the FSA and needed to know the best way to go about it. We attended numerous road shows and seminars, but it wasn't until we had a one-and-a-half day visit by Zurich that we concluded the best way forward was to start up a new company."The Zurich team's detailed analysis also noted failings in the firm's training and competence, and complaints procedure."We have now a detailed procedures manual that was instigated by Zurich and we are confident we will meet all the FSA deadlines," de Mel adds."We thought we were well ahead of others, but we were really sitting on our laurels and the Zurich visit was very helpful in flagging this up."The Insurance Group employs 38 in a business that does 60% commercial and personal lines; 35% life and pensions and 5% travel and property.
