We like to follow what is happening in the commercial insurance world in different countries.
We have just had news in the UK that the FSA continues to ban brokers for withholding premiums that are due to insurers. This seems to happen more with a business insurance broker that household, and this is where the bigger risks are.
News from Macon.com in the US reaches us of Philadelphia Indemnity Insurance Co. deciding to sue a father and son insurance agent for premium they collected from a customer but did not forward to the insurer.
Goodwill Industries, paid over $135,000 in premium that was not passed on. Now in the UK, you would need to bring a civil case to recoup the money, but what amazes me is how the broker actually slept at night.
We are under such strict rules and regulations in the UK that you start to sweat if you think you are going to submit a non-onerous return (of which there are many) one day late. How you can collect premiums that insure businesses, their assets and more importantly their employees, and not worry every second of every day that there is not a policy in force, is beyond me.
Thankfully, when you look around for cover in the UK you can rest assured that any agent or underwriter that you get your cover from is watched very, very closely. The returns we mentioned are only half the story, there are a myriad of rules in place, all designed to help protect you, the consumer.