TBE experts from the Bristol office of Lockton LLP discuss why changes need to be made in the broking world following breaking news of industry fines.
The FCA this week handed out fines of £15.5m to many of those involved in broking unrated insurers Balva and ERIC. On Tuesday February 2, unrated insurer Elite announced its exit from the solicitors market, citing the unsustainability of reducing premiums and increased fraud attacks.
Reckless conduct put Solicitors at risk
According to the FCA report, some 1,300 firms had their PII premiums ‘recklessly’ directed to parties other than the insurers and reinsurers responsible for paying claims, thereby increasing the risk that policyholders’ claims would not be paid.
In addition to sanctioning several of the individuals implicated in their investigation, the FCA has taken action against Millburn Insurance Company Limited, Coverall, and Bar Professions Limited, for their role in the collapse of Balva and ERIC.
With the exit of another unrated insurer, Elite, another group of firms will find themselves forced to find another insurer, although at least with a good lead in time, assuming a October 1 renewal date.
These events reinforce the value of choosing both an insurer and a broker who are in the market for the long-term and put your needs first.
Broking done differently
As a Chartered Broker of the CII, Lockton has to have demonstrated and continue to demonstrate a higher level of professional standards, ethics, and commitment to training than brokers that do not carry chartered status.
Unlike many other brokers, we do not use unrated insurers, as we believe we cannot represent your best interests by doing so. Recent history, including this latest unrated insurer exit from the Solicitors market has borne this out.
We boast unrivaled client retention rates, because of our commitment to client service.
To find out more about Lockton click here