March 26, 2014

Anti-regulation campaigner Steve ‘Walter’ White of fashion chain BIBA must be hanging his head in despair this week. All the good work achieved by his unstinting Nothing to See Here campaign has been undone at a stroke by the sensational findings of a survey carried out among brokers by news organ Insurance Times.

In it, 86% of brokers said they believed that brokers didn’t always put their customers’ needs first, whilst a mere 57% said they thought that some brokers sometimes did so some of the time.

Given that it is hard to conceive of a definition of treating customers fairly applicable to brokers that wouldn’t involve putting the client’s needs first, this unprecedented act of mass self-incrimination should spark considerable interest on the part of the regulator (or at least it certainly would have done if the dear old FSA were still in charge, given their well-documented and no doubt well meant, if now a tad outdated, interest in so-called TCF).

Nor is this collective outburst of self-harming insanity likely to play well with insurers, from whose representatives at the Association of Brutish Insurers we can soon expect to hear some pretty darned indignant rebuttals after brokers accused them of seeking to pervert and distort brokers’ honest desire to do the best for their clients at all times through a variety of financial inducements and incentives.

There was fanciful talk of things like ‘profit or volume-driven incentives’ which brokers taking part in the IT survey claimed were imposed on them by insurers who cared more about getting new business in than about whether or not their policies were the most appropriate for prospective policyholders. This is quite plainly nonsense. If such payments did indeed exist – or were even contemplated – surely Walter and his colleagues at BIBA would be campaigning vigorously to ban insurers from imposing them.

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