AT THE HEART OF THE ROAD TRANSPORT INDUSTRY.

Call our Sales Team on 0208 912 2120

Sign up or ship out

16th October 2003
Page 38
Page 38, 16th October 2003 — Sign up or ship out
Close
Noticed an error?
If you've noticed an error in this article please click here to report it so we can fix it.

Which of the following most accurately describes the problem?

Vany truck dealers sell insurance but from 2005 they will have to comply with new EU regulations.

Brian Weatherley reports.

TRUCK DEALERS and other companies involved in the sale of general insurance, including GAP and payment protection, and insurance-based warranties, will need to be authorised by the Financial Services Authority (FSA) from 14 January 2005 or risk prosecution and major fines for illegal trading.

The new law is being driven by the EU Insurance Mediation Directive and follows extensive consultation by the FSA relating to the forthcoming regulation of the general insurance industry.

From the haulier's point of view the new regulations are no bad thing, suggesting a more closely regulated industry that will be less open to abuse. The classic insurance conman was, of course. Dr Emil Savundra: back in the 1960s he left thousands of drivers without cover when his over-reached business crashed. Those with long memories will recall David Frost exposing this scandal in a live 'trial-by-television', at the end of which Savundra was arrested.

Dealers will have to choose

In the run-up to the new law every commercial vehicle retailer offering insurance cover will have the choice of stopping selling insurance altogether or becoming directly authorised by the FSA. Alternatively a dealer can become an 'Appointed Representative' of a company which is directly authorised by the FSA, or an 'introducer' to an authorised insurance provider.

Independent compliance expert Branko Bjelobaba reports that the new law will ban dealers from directly selling insurance products. including GAP insurance, payment protection, and extended or used vehicles warranties that are insurance (rather than manufacturer)based unless they gain FSA authorisation.

However,manufacturer guarantees, finance and HP deals, contract hire/lease purchase agreements and any other non-insurance based business will not be affected.Any salesmen or dealers who do not have FSA authority will not only have to cease selling insurance products from 14 January 2005. they will also have to cease managing existing policy covet or risk prosecution, says Bjelobaba. And he advises that those CV dealers considering applying for authorisation should do so before 14 July 20D4 in order to guarantee FSA assessmen: in time."If you've no authorisation then it's ix insurance," he warns,

Authorisation at a price

A sliding scale of charges for gaining authorisation is proposed, depending on the amounl of insurance business a company does although a discount will be available foi applications made to the FSA via the interne: before 1 June 2004. "You need to see if the insurance business your company does make: it worth applying." Bjelobaba concludes. •