Media Centre

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