Following the enactment of the new Financial Services Authority (FSA) regulation for general insurance, compliance organisation Auto Network UK has warned that finance houses and some manufacturer-tied finance companies may be limiting the options for motor retailers because of a misconceived belief that the retailers will not use their finance and therefore will not be able to sell their insurance products.
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“We are finding that a number of finance houses are refusing to allow their dealers to belong to a network because they think that the dealer will be forced to sell other insurance products”, said an Auto Network UK spokeswoman. “This is simply not the case. With [us], motor retailers have the choice of selling almost every insurance product on the market – we have ensured we have compliant processes that can be adapted to them all.
“Some motor dealers are also concerned that if they join a network, they will need to enter into multi-principal agreements with all the different insurance providers. Again, this is simply not the case.
“Finance houses should not, therefore, see us as a threat. Instead they should see the opportunities of retailers being FSA-compliant by being part of an authorised network which, in turn, will enable them to continue to sell their associated insurance products. The finance houses can only benefit.”
Auto Network UK is an FSA-authorised network, founded by staff with general insurance, motor and regulatory experience, that offers the facility for motor retailers to become appointed representatives, providing a practical and affordable way of enabling them to continue selling insurance products without direct authorisation.
This means they do not need to go through the complex application process and they will not need to report directly to the regulator. This is seen as an attractive solution for many smaller motor retailers and secondary intermediaries who want to concentrate on their core business and not dilute management time and energy on fulfilling the requirements of being directly authorised.
“Some retailers who originally applied for direct authorisation they are now finding the entire process quite onerous”, the spokeswoman added.
