Central Bank warns of insurance broker losses
A growing number of insurance brokers are running up losses which could leave consumers at risk, according to a report from the Central Bank on financial intermediaries.
Last year, more than 400 firms reported a loss and over 3 per cent made losses of more than €100,000.
However, more than 840 of the 3,238 registered firms failed to submit annual returns to the Central Bank within six months of their year end, as required.
In addition, the number of regulated brokerages fell by 562 last year as some firms failed to renew their authorisations and the regulator removed other “inactive, uncontactable and uncooperative” brokers from the registers.
There were 3,238 retail intermediaries at the end of last year, many of which are small-scale or sole-trader businesses, and more than half of those firms had a turnover of less than €60,000.
In total, more than 30,400 people are employed in regulated brokers.
‘Risks for consumers’
In response to the report, Central Bank director of consumer protection Bernard Sheridan said: “I would urge firms to ensure that while working to return to profitability, no actions are taken which could lead to additional risks for consumers.
“In particular, where firms grow due to acquisition they must ensure that they adapt their systems and controls to reflect the demands of a larger business and ensure compliance with consumer protection regulations.”
Almost 24 per cent of retail intermediates reported that they engage in unregulated business activities such as garages, estate agents, legal firms and auctioneers.
There were 15,873 complaints received in 2012, of which 653 were referred to the Financial Services Ombudsman by consumers.
The most common issues included unsolicited personal visits to customers, competency of advisers, advertising and unregulated activity.