Some brokers 'overcharging'

INSURANCE BROKERS are largely following the rules of the new consumer protection code, according to the financial regulator. However, an inspection of a sample number of companies in the sector uncovered "serious issues" in some firms.

Overcharging and lack of transparency on fees were two of the areas cited by the Irish Financial Services Regulatory Authority in its report yesterday.

The regulator found that the firms did disclose the fact that they would charge customers a fee. "However, we found that the detail contained in firms' terms of business documents varied greatly and, in the majority of firms examined, this information was non-specific in nature."

Insurance brokers have been told that they must fully disclose all charges "in a way that seeks to inform the consumer".

Where fees in excess of those notified to customers were charged, the regulator has written to the firms demanding that this does not re-occur.

The regulator also notified firms of the need to adhere to the consumer code in cases where brokers sold "optional extras with a product where it did not appear that the consumer had positively indicated that they wished to purchase this optional extra".

Firms were also reminded of their obligation to pass on premium rebates to customers in full and within five business days after it emerged that a number of firms had made deductions to such rebates in violation of the code.

The Professional Insurance Brokers' Association said that it did not condone practices which failed to comply with the consumer protection code. However, it said, "in fairness the regulator should, at a minimum, publish the number of cases it found to be non-compliant". Otherwise, honest brokers might be "unfairly tainted with the bad and unacceptable practices of . . . a few".