The warning comes after the collapse of life network Pure Protection, which has reportedly ceased trading, leaving financial uncertainty for its members and their clients.
CETA says intermediaries should ensure that any insurance network meets certain important criteria before they consider joining. CETA’s check list includes:
• Check the network keeps client monies and commission payments separate from the cash it uses to fund its own business
• If not, and the network goes bust, clients could be left without cover and brokers might not get paid
• Check the network is a member of a trade association, such as the General Insurance Standards Council (GISC)
• If not there is no guarantee that the network meets the high standards demanded by insurance trade bodies
If a network does not meet all these criteria CETA recommends that intermediaries take their business elsewhere. David Quick, Managing Director, CETA, said: "Networks have a responsibility to their brokers and the end customer. They should handle client monies in an open and transparent manner, and provide brokers with an efficient and reliable service. Brokers need the security of knowing that the network they are placing business with is financially robust and operating to a high standard.
"The collapse of Pure Protection highlights again the problems brokers face finding networks. CETA has been inundated with calls from intermediaries who are now without a network after the closure of Pure Protection. CETA has been working hard to help those brokers find the right life assurance products to continue providing their customers with good service."
