Examples of good and poor practice: General insurance intermediaries
We see these examples as a means of helping you think for yourself about how best to meet our high level requirements within your business. And, by publishing real life examples of practice on either side of the minimum standard, you can see how to draw the line in your business of what is and is not acceptable.
Management behaviours
Good practice
- Firm's gap analysis identified that its policy on mid-term cancellations was unfair. Management decided it would be fairer to charge a flat fee for cancellations which is disclosed upfront to its customers.
- Management became aware of a flood of complaints about a provider and its poor customer service in handling claims. Management took a proactive approach and moved business away from the provider. Each customer was contacted and provided with an explanation.
Poor practice
- Management not monitoring sales because it felt advisers were very experienced and did not need monitoring.
- Management did not react to a potential risk arising from its postal business. Firm noticed that majority of customers returned their Terms of Business Letter (TOB) back to the firm with other documentation. Firm did not improve its covering letter to make it clearer that the TOB is an important document and should be retained by the customer.
- Management engaged compliance consultants but failed to act on the advice given.
Sales and advice
Good practice
- Robust renewal process in place to ensure that customers are contacted ahead of renewal to check for any changes in circumstances. Each policy is re-brokered every year to ensure the customer has the best deal.
- Management challenged providers on the unfairness of the wording of system generated policy documents.
- Demands and Needs statement reviewed and unnecessary jargon removed.
Poor practice
- Inadequate Know Your Customer (KYC) information regarding eligibility and suitability of payment protection insurance sales.
- Advisers not being trained on the firm's full product range which resulted in customers being recommended a product from a limited range.
Complaints handling
Good practice
- Firm conducted in-depth root cause analysis of complaints and created a log of lessons learned from each complaint.
- Firm contacted customers after resolution of their complaint to get feedback on how to improve their service.
Poor practice
- Insufficient complaint handling procedures. Management felt their only obligation was to point out to customers what they needed to do if they had a complaint. Staff had not been trained or was unaware of what constituted a complaint, which meant that complaints had been received, and not acted upon. Other firms could not see the point of having written complaint procedures if they hadn't received a complaint.
