Following on from the recent collapses of Gable, ERIC, Balva, Lemma, Enterprise, Alpha and Qudos it looks another Overseas Insurer, Lamp Insurance has been added to the list! This leaves UK policyholders exposed without adequate cover.
Once again clients of Munro-Greenhalgh Ltd are not affected as we have always preferred to use reputable financially secure UK Insurers such as Aviva, AXA, Allianz, Royal & Sun Alliance, NIG, Ageas and Zurich to name just a few.
Although an Insurance Broker does not have a duty to guarantee an insurer’s solvency our regulator, the Financial Conduct Authority, expects that the appropriate due diligence has been carried out by the insurance broker and that a full explanation of the risk has been given to the client in writing in a way that they can understand, so that they can make an informed decision before they purchase the policy.
On the rare occasions we do need to approach smaller specialist insurers we take reasonable steps to ensure that our Insurer partners both in the UK, and if necessary overseas, are able to pay claims in full and will also warn our clients in writing of using a ‘weaker’ insurer.
Is it worth the gamble of dealing with an Overseas Insurer?
The answer is simply NO unless: –
- Your Insurer has a good financial strength rating from independently verified i.e. Standard & Poors, AM Best etc.
- Your Insurer has been correctly ‘passported’ to allow them to trade in the UK under a ‘Cross Boarder Services Passport’. However, with the uncertainty of BREXIT this may have to change!
- Claims are dealt with by a UK based claims handling service.
- Your Insurer contributes towards the UK Financial Service Compensation Scheme (FSCS), so that if they fail then their policyholders are still offered some protection.
- You are allowed to use the UK Financial Ombudsman Service (FOS) to resolve a dispute. If not you may have to deal with an overseas regulatory authority which will be time consuming and expensive.
Only as a last resort!
Where you have no choice but to use a weaker insurer this should only be as a last resort, when other secure markets will not provide cover. Don’t use an insurer solely because they are cheap – you get exactly what you pay for!
At Munro-Greenhalgh Ltd we work with quality Insurer partners to ensure that our clients are protected getting the best cover at the best possible price. This usually means: –
a. ‘A’ Rated and above secure insurers
b. UK based claims handlers
c. Financial Ombudsman Services cover
d. Financial Services Compensation Scheme protection