“Add ons” – the FCA mean business

April 24, 2015

It’s almost a year since we commented on the Financial Conduct Authority’s (FCA) thematic review of conflict of interests and remuneration amongst insurance brokers. A key element of this review was the subject of “add ons”. (See “The Future of Commercial Insurance”).

Premiums for these products are, generally, relatively small and therefore easily sold by brokers – whether you need one or not. Conversely, commission rates tend to be on the high side so worth putting on the agenda for the annual review. Our advice has always been – ask why? Why didn’t I need this last year? What has happened that my business suddenly needs this extra protection?

To be fair, there is often a business need which can now be satisfied more effectively and cheaply than before and the good brokers will be able to make a suitable case.

Just to show they weren’t kidding, the FCA recently issued a fine of £159,300 against the Moorhouse Group for mis-selling of “add ons” related to commercial vehicle insurances. Not a big amount in the great scheme of things, and it did relate to “problems” some 18 months previously, but the marker is down.

If you’re not sure why you need the latest “must have” insurance or just need a second opinion then don’t be afraid to get in touch – no charge!

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