It was then accepted that “non-mandated” intermediaries could operate a binder, provided, however, that they were for the brokerage services of the client`s agents and for the binding functions of the insurer`s agents, with the insurer remaining responsible for the delivery of the binder. The limitation of the interest was deemed necessary to prevent the un mandated intermediary from acting at the expense of the client in the interests of the insurer. Establishes a detailed written agreement with the binder in accordance with the requirements, Including: It should be noted that binders do not include intermediaries who use the technology to record transactions on a terminal in their office that returns directly to an insurer`s computer to create offers to download risk details, but these are the parties authorized to hire an insurer in case of risk (in certain guidelines) without first contacting the insurer. All binders` remuneration must be reasonable and consistent with the cost of performing the binding function, taking into account the type of function and the resources, skills and skills required to perform the function. It should not lead to double counts. Conflicts or potential conflicts with the interests of policyholders must be mitigated and payment must not impede the provision of fair results to policyholders. The Financial Sector Conduct Authority (FSCA) believes that a capped fee for binder functions will reduce conflicts of interest for binder holders acting as INMI. This is because it is consistent and would be reasonable and consistent with the function performed. It will prevent insurers from purchasing FSP stores by offering higher binder fees and FSPs that buy for higher fees regardless of customer interest. In addition to the new rules for the protection of policyholders, the FSB has introduced new regulations on binders that affect not only the way you do business, but also your pocket. While the rules stipulate that the insurer should limit or limit the discretion of the binder holder, the conditions of most binders are generous in the scope of the given mandate. An insurer must now notify the Registrar in writing of the proposed binder contract at least 30 days before the conclusion. This stifles the process a bit, because it means that you can only implement a binding agreement 30 days after notification to the regulator.
And in this communication, the FSB wants to see how taxes are fixed. So you can`t just say, “I give the capped tax, because it`s the cap The tax still needs to be developed to make sure that even if you pay the cap, it`s still fair and reasonable. You need to have the right processes, people, skills, etc., to run the binder. Insurers have been tasked with doing this directly. There is no transition period. Separate forms must be filled out for each binder agreement and for each book of the terminated guidelines. The forms are available on the FSB website.