September 23, 2019 09:30
If the draft regulations on brokerage in damage insurance, thefinancial markets Authority is going forward in its current form, there will be an attrition of the network of brokerage professionals, believes Louis Wood, president of the banner Brokers united States.
In a communication sent to its members, and of which the of the insurance Journal has obtained a copy, Mr Wood points to many points against the project from the regulator
One of his points is the reduction of the brokerage in itself, fears the president of Brokers Usa. In his letter, which is also filed in the framework of the consultation of the Authority, it indicates that the consumer has not demonstrated the need to know exactly the percentage of volume that the broker has with the insurers.
“The consumer needs to know if the broker is able to check different vendors. My opinion is that this requirement goes beyond the demands of the consumer. The network of brokerage professionals at risk of attrition arising from the regulation as it has been presented ; which will hurt consumer services. “
“A burden of disclosure disproportionate”
For Mr. Wood, the brokers need to increase their operational efficiency. He adds that the requirements of the business of the insurance broker of damages are enormous, ranging from product knowledge to the systems of the insurers.
“Add a additional disclosure would further reduce the performance and the profitability of brokerage firms. It would be much more sensible to include this statement on the website of the broker and on the documentation to be sent to customers. “
Mr. Wood goes on to state that if a brokerage firm demonstrates to regulatory authorities that it has met the requirements to have the name of a broker, why should it also have the obligation to disclose to each customer ?
“The brokerage firms and their brokers have a burden of disclosure disproportionate in comparison to the agencies that would be newly created. It would be necessary to make this disclosure for each product covered by the proposed regulations, by writing to the issuance and at each renewal, but also verbally, before inquiring of the situation of his client. Add to that the disclosure of the name of the three major insurers and the percentage invested with each. For agencies, there is no mandatory disclosure. “
Disclose that there is more broker
Mr. Wood argues that the disclosure verbale should be imposed on the new agencies and agents are using to inform their customers that they are not broker-dealers, and for a period of two years.
For brokerage firms, it finds that the fame that gives the accreditation exercise of the Authority is sufficient. He adds that the current provisions of the Law on the financial products and services are enough, since they are already worth to Internet sites and written communications with customers.