Dealer group Fortnum Financial Advisers is requiring the major risk insurers to meet a higher set of standards before they can be admitted to the group's Approved Product List as "preferred insurers".
The new, higher standards have been developed by Fortnum in liaison with Money Management columnist and Integrity Resolutions principal Col Fullagar.
Under the new arrangements, major risk insurance companies are being required to meet a set of higher standards across a range of criteria including policy design, resolution processes, and service standards.
According to Fortnum principal Ray Miles, the new standards have already received a positive reaction from planners within his group, particularly those going to accountability.
The standards are outlined in Fortnum Risk Insurance APL (Approved Product List) document and make it very clear what is expected of the insurers such as:
• Reputation: an Approved Insurer, its management and staff must have and retain a reputation within the financial services industry and the general community that would reasonably be seen by a Fortnum client as reflecting in a positive way on Fortnum and its advisers.
• Risk insurance policies: an Approved Insurer must make available and be able to effectively administer a range of risk insurance policies that are capable of meeting the protection needs of Fortnum clients. The terms and conditions of these risk insurance products must be written in a way that facilitates unambiguous understanding.
• Resolution process: an Approved Insurer, in any area of disagreement between a Fortnum client, Fortnum itself or a Fortnum adviser and the insurer, must be willing to discuss the matter until such time that all parties involved agree no further progress can be made despite the best endeavours of all parties. Discussions may involve face-to face-meetings at the request of any involved party. If it is agreed no further progress can be made, referral to an appropriate external or internal body can then be made.
• Underwriting and claims information: an Approved Insurer must be willing to provide a Fortnum client, Fortnum itself or a Fortnum adviser information obtained during the underwriting and/or claims process, subject to the authority of the client and in line with privacy laws.
Commenting on the process, Fullagar said he believed the approach would help impose some accountability standards which would assist both advisers and their clients.
He said it would be a matter for each of the insurers how they viewed the process, but they could be in no doubt about what was required to be listed on the APL as a "preferred" or "approved" insurer.
