I read an article last week concerning Regent cancelling all its commercial and personal lines policies. Naturally, these clients will be forced to find alternative cover. Advisors assisting such clients must take care that the correct procedure is followed. Simply getting a broker’s note and a new debit order is not enough.
When you transfer a book, or a single client, from one insurer to another, there are very specific requirements. There is no difference in the requirements, whether the change is on a voluntary basis or forced, such as this case, where the provider cancelled all its policies. At the heart of these matters lies the welfare of the client.
Despite the circumstances, this is a policy replacement. The first step is to obtain express permission from the client to place the policy with another insurer, stating the specific reasons for the move. The client has the option to elect whether he or she wants to move to the new insurer, or not. If satisfied, they must indicate this in the broker’s note.
The advisor also needs to complete a replacement record of advice comparing the existing policy with the new policy, as well as the rest of the requirements related to rendering financial services, e.g. pointing out all material conditions such as exclusions and excesses applicable to the new contract. This needs to be discussed with the client.
Bulk transfers involve a lot more than it did in the good old days. Be careful out there.