PUBLIC confidence in brokers and investment intermediaries has been set back by the Taylor Group scandal. The Professional Insurance Brokers Association, (PIBA) which represents mainly smaller insurance brokers has recently published guidelines for its members and the public for the proper transaction of insurance and investment purchases.
PIBA, which was established two years ago, is not associated with the Irish Brokers Association. PIBA is a trade association regulated by the Irish Intermediaries Compliance Bureau (in turn part of the self regulated Irish Insurance Federation), and is keen to "become the authoritative voice for independent brokers ... who offer in a dependent advice and independent choice to the consumer in the selection of insurances, pensions, mortgages and other financial products."
VI HA, with over 300 members to date, say it has been well served by the IICB which acts swiftly to remove brokers who have not complied with accounting requirements or other features of the IIF code of practice and the various insurance Acts. It has called for the establishment of a single regulatory authority for the wider financial services sector and says it would "welcome a debate on all the issues, including commissions, charges and fees." It says it would have no objections to the broker community coming under the aegis of the Office of the Insurance Ombudsman, whose current remit does not allow any investigation of consumer complaints against independent life and pensions brokers. (Such complaints must be dealt with by the IBA or IICB).
PIBA's guidelines to cover arrangements of life assurance, pensions, savings plans and lump sum insurance investments are as follows.
. Clients should enquire if the broker is a member of the PIBA or IBA and seek evidence of membership whether from the IICB, the IBA.
. All cheques should be made payable directly and only to the institution with whom all business is ultimately being transacted and should be crossed. There is no necessity for cheques for large amounts to be made payable to the intermediary.
. Where a cheque is offered to the intermediary, the client must be given a receipt. The receipt must specify the name of the insurance company with whom the policy is being taken out, the commencement date, the premium collected and by whom it is being collected. Such a receipt is recognised by insurers as evidence of premium.
. Clients should always insist on a receipt in respect of any transaction and it should specify name and address of the client and the amount paid. It must also state the product and name of the insurance company, as required under section 52 of the Insurance Act.
. Clients should rely on their broker for good after sales service however, clients should be aware that they are entitled to seek access to information regarding their, policies from their insurer.
PIBA also includes a set of guidelines for non-insurance investments such as deposits, shares, unit trusts, SICAVs, etc. It recommends that clients check to make sure the intermediary is registered with the Department of Enterprise and Employment, as required under the Investment Intermediaries Act or through membership of the IBA. Such an intermediary must hold a Grant of Authorisation from the Department and a bond for a minimum of £59,000. "The client should seek proof of existence of all the above." All cheques should be made payable to the institution and, most importantly, "be crossed for their account with that institution." Section 30 receipts and a statement of account should be received within a week of lodgement and the client should also demand a confirmation letter from the institution confirming that the monies have been invested in the name of the client plus the terms and conditions of the investment.
