Brokerage expelled by IBA is re-registered by IICB

A Cork-based insurance brokerage which was expelled from the Irish Brokers' Association last week has just been re-registered with the Irish Insurance Compliance Bureau. This means that the firm can continue to place general insurance business with insurance companies despite its expulsion from the IBA.

Pratt Insurances Ltd, of Ballincollig, Co Cork, a non-life brokerage, is understood to have been expelled from the IBA for not disclosing a service fee charged to a client and for placing an insurance risk with an insurer not authorised to insure in the Irish market. The first offence was a breach of the IBA code of conduct. In a statement, Pratt Insurances insisted that it operated "in accordance with the provisions of the Insurance Act 1989 and the regulations thereunder". It said it was "in dispute with the IBA on a matter relating to a commercial fee". The statement said the company was registered with the IICB and was fully bonded.

Last night, the managing director, Mr Frank Murphy, declined to elaborate on the statement. Pratt Insurances was a private company and he was not willing to discuss the dispute or any details about the company, he said. It is understood that the company maintained it was unaware that business was placed with a non-authorised insurer as that business was placed through a UK broker. Mr Murphy declined to disclose if the company had repaid the service fee to the client involved or whether legal action had been taken by the client.

The IBA chief executive, Mr Paul Carty, confirmed that Pratt Insurances Ltd was expelled from the association last week. "We had a complaint from a member of the public which we investigated. Following that investigation we took the decision to expel the firm." Mr Carty declined to reveal the nature of the complaint or the amount of money involved. He said he was precluded from further comment because the issue was the subject of a court action.

Mr Paul Gallagher, from the IICB, confirmed that Pratt Insurances Ltd has been re-registered to transact general insurance business. Insurance brokers must be registered with either the IBA or the IICB before they can place business with insurance companies.

Explaining the decision, Mr Gallagher said it had the required letters of appointment (to act as broker) from five insurance companies, its £50,000 bond to protect customers was in place and its accounts and accountant's report were in order. The section 48 client account - the separate bank account in which money paid in by clients must be lodged - and the section 52 receipts - receipts issued to clients - were in order, he said.

"There was no reason not to register this company," Mr Gallagher added.

Asked if the IBA had disclosed to IICB why the company was expelled, Mr Gallagher said that the IBA was asked but had not responded. The IICB is the regulatory wing of the Irish Insurance Federation, a body set up by the life and general insurance companies. The IBA is the other regulator of insurance intermediaries under the 1989 Insurance Act.

Wealthy Cork business man Mr Richard Pratt junior is understood to be the major shareholder in Pratt Insurances Ltd. He has a number of business interests. He is a son of Mr Richard Pratt who set up Richard Pratt Insurances, Life and Pensions, a sole trader in the life assurance business, which remains a member of the IBA. Both insurance businesses operate separately out of the same premises on Main Street in Ballincollig. The company has another office in Inchigeela, Co Cork.

The company is understood to have an annual turnover of about £3 million and annual commission would be over £300,000. Mr Carty confirmed that Richard Pratt Insurances was a member of the IBA.