The Law Commission has confirmed it is investigating the responsibility of advisers during the protection application process, as part of a wider examination into the law of 'agency'.
IFAonline revealed last month the Law Commission was preparing a further insurance law issues paper, which would specifically examine the relationship between intermediaries and providers and raise questions over the adviser's responsibility for non-disclosure.
In a meeting with the industry yesterday, the Commission confirmed it is examining situations where a customer gives their adviser information during the application process, but the adviser fail to pass this on or incorrectly complete a form on the client’s behalf.
The investigation is part of a wider consultation on the law of agency, as it is currently unclear whether an intermediary is acting as an agent for their client or for the insurer, particularly as commission does not have to be disclosed at the quote stage under the insurance conduct of business (ICOB) rules.
Nick Kirwan, protection market director at Scottish Widows, says it would be extremely helpful if the Law Commission and industry could decide once and for all who the intermediary is legally acting for.
He states: “Customers really ought to know who their advisers are acting for. If you went to a lawyer for help in buying a house and then found out they were acting for the estate agent or the seller, you would be very confused because you would assume they were acting for you.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7034 2680 or email [email protected].IFAonline
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