What exactly is Andrew Paddick on?
(8 January, Insurance Times) While we at Leisureinsure agree that brokers should be able to use wholesalers with confidence, does Paddick not think that the industry as a whole is currently faced with enough costs implementing the FSA regime?
We have audited accounts, which are closely inspected by the providers of our delegated authorities. I fail to see why we should be expected to pay for a further independent audit. Perhaps we also should send our auditors to his members, at their expense, to confirm their financial stability?
We have letters from all our providers confirming that we are authorised to sub broke our delegated authorities - and these are readily provided to brokers upon request.
Our delegated authorities, and of course our audited accounts, contain confidential information which could benefit our competitors, so we have no intention of allowing Paddick's inspectors access to this information.
Such refusal should not be taken as an indication of any malpractice. Paddick's "declined to participate" would constitute such indication, probably with resultant legal action against him.
Brokers, when dealing with wholesalers, should ensure that: a) they obtain written confirmation from the security that the wholesaler is authorised to act on their behalf (and this information should be readily available from the wholesaler - if not, ask why); and b) they obtain a policy document speedily.
Genuine wholesalers provide a much needed service to the market in respect of specialist, niche market products and, as we share commission with the placing broker, margins are tight. Perhaps we should pass the cost of Paddick's inspections back to his members as a fee?