Article date: 20 September 2005
The threat of fines or being barred from doing business underthe FSA’s rules regarding broker-insurer tradingarrangements can be avoided with the help of a new online toolfrom Norwich Union.
The Broker Regulatory Risk Tool allows intermediaries – atno cost - to assess the level of risk and value presented to themby a variety of different trading methods and incentives.
Once the broker has awarded a score for each arrangement, the toolthen shows the level of possibility that a particular incentivemight lead to non-FSA compliant activity – depicted in a“red-amber-green” format to show the level ofdanger.
Common trading choices covered by the tool include profit share,over-riders, receiving loans from insurers, the impact of havingon-site underwriters, etc. The FSA principles at stake for thebroker are treating the customer fairly, conflicts of interest andintegrity.
Simon Bloomfield, broker proposition development manager atNorwich Union, says: “Just because something is consideredto be a ‘market practice’ does not mean that it isgoing to be compliant and the online tool is aimed at helpingbrokers to manage the potential regulation risks that theyface.
“And it is important to remember that the type ofarrangement is not the sole issue; the systems and controls that abroker uses to ensure the arrangements are not usedinappropriately within their business are equallyimportant.”
He adds: “Brokers obviously know that it is possible to fallfoul of the FSA and, in extreme circumstances, they could bedisallowed from trading. What we are doing through the regulatoryrisk tool is trying to make brokers aware of the potential riskthat their business faces, so they can make the necessaryarrangements to eliminate them or manage them appropriately”
The regulatory risk tool can be found at: http://www.nuebroking.com/business-advisor/fsa-regulations/fsa-regulatory-tool.htm
For further information, please contact:
Jon Clements at Staniforth on 0161 274 0100/07989414486
Sally Leeman at Norwich Union on 01603 684225/07800 699670.
Notes to editors:
About Norwich Union Insurance
- Norwich Union is the UK's largest insurer with a market shareof around 14 per cent
- With a focus on insurance for individuals and smallbusinesses, Norwich Union insures:
- One in five households
- One in seven motor vehicles
- Around 800,000 businesses
- Norwich Union products are available through a variety ofdistribution channels including brokers, corporate partners suchas banks and building societies and Norwich Union Direct.
- Aviva, Norwich Union’s parent company, recentlyannounced its acquisition of the RAC. The acquisition bringstogether the RAC's powerful brand and customer base with theexpertise and leading position in motor insurance of Norwich UnionInsurance.
- Norwich Union's news releases and a selection of images areavailable on the Aviva internet press centre at www.aviva.com/media.
- An ISDN facility is available for studio quality broadcast.Call the press office on 01603 682264
Norwich Union Insurance Limited Registered in England No99122.
Registered office: 8 Surrey Street, Norwich, NR1 3NG
Authorised and regulated by the Financial Services Authority
Member of the Aviva group.