A second thematic review into appointed representative (AR) networks – that’s what Chartered insurance broker and AR network principal Gauntlet Group is hoping will be undertaken to ensure everyone is up to par.
“Since the Financial Conduct Authority’s (FCA) last thematic review into networks, the results of which were published in summer 2016, new networks have formed and insurance broking has experienced widespread digital transformation, with insurance being transacted in different ways and often by brokers working more remotely and not necessarily under the close scrutiny of their principal,” asserted the group in a statement sent to Insurance Business.
“With greater competition for network recruits, Gauntlet believes some appointed representative recruitment standards may have slipped, as some have sought to grow or avoid shrinkage at all costs. Not all of the ARs taken on may have the insurance background and grounding in insurance compliance required to maintain FCA standards and some may be calling on their professional indemnity cover to an unsatisfactory degree.”
In Gauntlet’s view, not all of the training delivered by network principals may be at a level that can prevent future client issues. The group, which has more than a decade of experience running a network, is seeking assurances that standards are being maintained across the industry.
Gauntlet Group managing director Roger Gaunt (pictured) declared: “While it may look easy to establish a network and become an appointed representative principal, it most definitely is not. We have had to demonstrate a continual and time-intensive commitment to monitoring, checking on standards, and providing systems that promote compliance, and that takes a lot of money and effort.
“We would just like to be assured that all networks have operated with the same degree of due diligence, and the only way to do that is to have another review into practices within the sector. With five years having passed since the last actual review was undertaken, it is probably now time to go through that process again, given the digital transformation that has taken place.”
The MD added that networks have nothing to fear if they are being run professionally, and that it is in the client’s interest to crack down on non-compliant practices and elevate standards.