New Model Adviser - 24th November 2008

Professional indemnity (PI) insurance underwriters who say soliciting treating customers fairly (TCF) feedback could inflate premiums or render cover invalid by inviting complaints have come under fire, writes Richard Harris.

Software company FinQS said that encouraging IFAs not to gather feedback was ‘ridiculous’. Phil Reed, operations director at FinQS which developed The TCF Centre to automate feedback via online questionnaires, said the Financial Services Authority’s (FSA) broad definition of a complaint – ‘any expression of dissatisfaction, whether oral or written’ – was partly to blame.

But he said underwriters were holding advisers ‘to ransom’ over the issue, and said networks and support services companies such as SimplyBiz and Bankhall that advised against gathering feedback were not acting on behalf of their members.

The FSA policy department admitted the distinction between a complaint and an expression of dissatisfaction was ’fluid’; but said that, ‘only in unusual circumstances would feedback on customer satisfaction questionnaires constitute a complaint’.

One Underwriter, Collegiate, said questionnaires should be agreed with insurers and sent out soon after the advice was given, but supported TCF questionnaires in principle. ’Any initiative to encourage treating your customers fairly can only be positive and any insurer currently involved in the IFA PI insurance market has to embrace this and adapt’, said Collegiate underwriting director Richard Turnbull.

But Sifa compliance director Ian Cockrill said not all underwriters agreed. ‘It’s a legally dicey area-insurers being what they are they will always use it as an excuse to invalidate cover.