Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Is my broker liable?

Options
13

Comments

  • Options
    #62
    peteb2
    Registered Users Posts: 1,813 ✭✭✭peteb2


    Brokers don't provide insurance undertakings. insurance companies do. And they are monitored by the Central Bank.

    And just FYI if this was RSA that went bust or Aviva, or Allianz, people still wouldnt be getting their premiums back.


  • Options
    #63
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,711 Mod ✭✭✭✭Henry Ford III


    Brokers provide advice and amongst other things act as agents for Insurers. They are regulated by the Central Bank.

    Insurers provide cover and are regulated by their "home country" regulator.

    Setanta are broke, but what about the responsibilties of Brokers who gave what turned out to be poor advice? Surely they should have known better?


  • Options
    #64
    Fred Swanson
    Closed Accounts Posts: 21,730 ✭✭✭✭Fred Swanson


    This post has been deleted.


  • Options
    #65
    peteb2
    Registered Users Posts: 1,813 ✭✭✭peteb2


    Henry Ford III wrote: »
    Brokers provide advice and amongst other things act as agents for Insurers. They are regulated by the Central Bank.

    Insurers provide cover and are regulated by their "home country" regulator.

    Setanta are broke, but what about the responsibilties of Brokers who gave what turned out to be poor advice? Surely they should have known better?

    And we had already established that no one could have foreseen the likelihood of Setanta going bust, having no access to financials. You have mentioned life assurance companies credit status. But this has no bearing on general insurance companies. Some of the largest UK insurers have no credit rating.


  • Options
    #66
    peteb2
    Registered Users Posts: 1,813 ✭✭✭peteb2


    Fred Swanson wrote: »
    This post has been deleted.

    Again no grounds for any broker to be investigated due to an insurance company going bust. Its just an unfortunate event.


  • Advertisement
  • Options
    #67
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,711 Mod ✭✭✭✭Henry Ford III


    peteb2 wrote: »
    And we had already established that no one could have foreseen the likelihood of Setanta going bust, having no access to financials. You have mentioned life assurance companies credit status. But this has no bearing on general insurance companies. Some of the largest UK insurers have no credit rating.

    We had established nothing of the sort. For whatever reason I think you're spoofing here.

    Which insurers trading here have no credit rating? Can you name 2 or more?


  • Options
    #68
    peteb2
    Registered Users Posts: 1,813 ✭✭✭peteb2


    I said there were insurers in the UK that had no credit rating. They don't do motor and you probably haven't heard of them. Credit rating means nothing except for the fact you paid someone to take a look and say you were ok.


  • Options
    #69
    oldyouth
    Closed Accounts Posts: 4,754 ✭✭✭oldyouth


    Groundsource wrote: »
    interesting article, http://www.independent.ie/irish-news/eu-to-probe-collapse-of-setanta-insurance-30216687.html especially the comment that
    "The insurer had been winding down its business here since the start of the year, when it had 100,000 policyholders." Broker should have been aware of this pending collaspe.

    Insurers entering and withdrawing from the market here is a regular event and the run off is usually conducted in an orderly fashion without any hardship to policyholders


  • Options
    #70
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,711 Mod ✭✭✭✭Henry Ford III


    peteb2 wrote: »
    I said there were insurers in the UK that had no credit rating. They don't do motor and you probably haven't heard of them. Credit rating means nothing except for the fact you paid someone to take a look and say you were ok.

    How are they in any way relevant then?


  • Options
    #71
    peteb2
    Registered Users Posts: 1,813 ✭✭✭peteb2


    Because credit rating or lack there of is no measure of an ability to pay claims.


  • Advertisement
  • Options
    #72
    bertie 56
    Registered Users Posts: 602 ✭✭✭bertie 56


    I discover this couple of days ago :

    Letter from Setanta Insurance to policyholders , the 27 January 2014

    " Dear Policyholder,
    It is with sincere regret to announce that, Setanta Insurance Company Limited, has ceased writing new business and issuing further renewals with effect from close of business Friday 24 January 2014."

    It has been in the press few days after.

    I never received this letter, but my broker surely got the news.
    Nevertheless, I got a renewal of my contract beginning of February.

    During these 3 months, not a news from my broker.

    Now, two simple questions here :

    - Do you need a PhD in Business to understand that a company which doesn't have money entering will have some difficulties sooner or later to have some money going out ?

    - Would the broker have had the same behaviour with policyholders' money if they would have been liable ?

    :rolleyes:


  • Options
    #73
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,711 Mod ✭✭✭✭Henry Ford III


    peteb2 wrote: »
    Because credit rating or lack there of is no measure of an ability to pay claims.

    Of course it is. It's a 3rd party view on financial strength. Credit ratings aren't perfect but in the absense of other data can be valuable in making comparisons.

    Certain credit ratings are absolute - if yours was poor enough you'd be unable access credit.


  • Options
    #74
    peteb2
    Registered Users Posts: 1,813 ✭✭✭peteb2


    Henry Ford III wrote: »
    Of course it is. It's a 3rd party view on financial strength. Credit ratings aren't perfect but in the absense of other data can be valuable in making comparisons.

    Certain credit ratings are absolute - if yours was poor enough you'd be unable access credit.
    But im an insurance company so I Don't require a line of credit. I should have sufficient funds to hand.


  • Options
    #75
    P. Breathnach
    Registered Users Posts: 12,089 ✭✭✭✭P. Breathnach


    bertie 56 wrote: »
    ...
    - Do you need a PhD in Business to understand that a company which doesn't have money entering will have some difficulties sooner or later to have some money going out ?
    ...
    It would be wrong if an insurance company were using this year's premium income to meet claims made last year or in previous years: it should have reserved a sufficient amount from the premium and investment income from earlier years. Otherwise the insurance business would be a Ponzi-type scheme.


  • Options
    #76
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,711 Mod ✭✭✭✭Henry Ford III


    peteb2 wrote: »
    But im an insurance company so I Don't require a line of credit. I should have sufficient funds to hand.

    Indeed. If you don't however your credit rating will reflect this, and a good broker will advise his customers to avoid you.


  • Options
    #77
    peteb2
    Registered Users Posts: 1,813 ✭✭✭peteb2


    Henry Ford III wrote: »
    Indeed. If you don't however your credit rating will reflect this, and a good broker will advise his customers to avoid you.

    No it doesn't. I'm afraid your background in financial services is clouding your vision here. General insurers are completely different to assurance companies.


  • Options
    #78
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,711 Mod ✭✭✭✭Henry Ford III


    peteb2 wrote: »
    No it doesn't. I'm afraid your background in financial services is clouding your vision here. General insurers are completely different to assurance companies.

    I've no idea wat you're replying to there. Certainly wasn't to my last post.

    In any event yes I know the difference between a life co. and a general co.

    From a legislative and compliance perspective regarding brokers and their advice to clients there's no differentiation however.


  • Options
    #79
    peteb2
    Registered Users Posts: 1,813 ✭✭✭peteb2


    Then you the credit rating of a life assurance company with whom I put a pension with and expect to pay out 500k over futures years credit rating may concern me, where as someone insuring my 5k car is a different kettle of fish. In any event the ICF would pay out for the claim.


  • Options
    #80
    Jim2007
    Moderators, Business & Finance Moderators Posts: 10,280 Mod ✭✭✭✭Jim2007


    Henry Ford III wrote: »
    Yes I do. Credit ratings for example are easily accessed.
    Henry Ford III wrote: »
    No. You can find them yourself very easily. Regarding the broken link google "Irish Life credit rating". Similar information is readily available for all the major players.

    Now this thread is in danger of turning into a bit of an amateur witch hunt (I suspect by people with vested interests) so 2 final thoughts:-

    Now I understand... that you have no idea of what are talking about! When it comes to assessing the ability of an insurance company to meet claims, credit ratings are as useful as a chocolate teapot!

    To assess the ability of an insurance company to meet claims you'd need access to detailed information about how the combined ratio was calculated, the state of the sinking fund, an analysis of the assets in the fund and a whole lot of other information that no insurance company is going to toss out to brokers etc...


  • Options
    #81
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,711 Mod ✭✭✭✭Henry Ford III


    Jim2007 wrote: »
    ...To assess the ability of an insurance company to meet claims you'd need access to detailed information about how the combined ratio was calculated, the state of the sinking fund, an analysis of the assets in the fund and a whole lot of other information that no insurance company is going to toss out to brokers etc...

    I'll ignore the personal attack.

    However the likes of Moodys, Standard and Poors, and Fitches take all that information you've mentioned plus plenty more into account when doing their financial assessment of their customers. Do you know who pays them?

    A broker doesn't need to have hugely detailed information on the insurers, but should be easily able to differentiate between a financially strong product provider, and a weak one. Competing insurers are well able to deloiver bad financial news on a rival.


  • Advertisement
  • Options
    #82
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,711 Mod ✭✭✭✭Henry Ford III


    peteb2 wrote: »
    Then you the credit rating of a life assurance company with whom I put a pension with and expect to pay out 500k over futures years credit rating may concern me, where as someone insuring my 5k car is a different kettle of fish. In any event the ICF would pay out for the claim.

    Any idea how potentially big a motor claim might be?

    It can run to many millions.


  • Options
    #83
    Jim2007
    Moderators, Business & Finance Moderators Posts: 10,280 Mod ✭✭✭✭Jim2007


    Henry Ford III wrote: »
    However the likes of Moodys, Standard and Poors, and Fitches take all that information you've mentioned plus plenty more into account when doing their financial assessment of their customers. Do you know who pays them?.

    Well credit ratings are most often paid for by the company needing the rating. They are needed by companies seeking to obtain a substantial line of credit or issue a corporate bond and indicate the ability of the company to meet that commitment and that is all. Now since premiums, the sinking funds etc are not available to meet such credit demands, it a very misinformed agency that would start to do so.

    This is a kin to people who think that their deposits are safer in a treble A rated bank, despite the fact that it has almost nothing to do with it.


  • Options
    #84
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,711 Mod ✭✭✭✭Henry Ford III


    Jim2007 wrote: »
    Well credit ratings are most often paid for by the company needing the rating. They are needed by companies seeking to obtain a substantial line of credit or issue a corporate bond and indicate the ability of the company to meet that commitment and that is all. Now since premiums, the sinking funds etc are not available to meet such credit demands, it a very misinformed agency that would start to do so.

    This is a kin to people who think that their deposits are safer in a treble A rated bank, despite the fact that it has almost nothing to do with it.

    http://www.standardandpoors.com/ratings/insurance/en/us

    Insurance Financial Strength Ratings – useful for buyers of insurance, risk managers and employee benefit administrators, this type of rating provides details on an insurance organization’s ability to pay its policies and contracts. Insurance brokers and agents may also use these ratings to meet due diligence and disclosure requirements.


  • Options
    #85
    peteb2
    Registered Users Posts: 1,813 ✭✭✭peteb2


    Henry Ford III wrote: »
    http://www.standardandpoors.com/ratings/insurance/en/us

    Insurance Financial Strength Ratings – useful for buyers of insurance, risk managers and employee benefit administrators, this type of rating provides details on an insurance organization’s ability to pay its policies and contracts. Insurance brokers and agents may also use these ratings to meet due diligence and disclosure requirements.

    So the person you pay for the service is advertising the possibility of its uses.......hmmmm.

    Also since its a US link are you aware of the compliance requirements for US insurers?


  • Options
    #86
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,711 Mod ✭✭✭✭Henry Ford III


    peteb2 wrote: »
    So the person you pay for the service is advertising the possibility of its uses.......hmmmm.

    Also since its a US link are you aware of the compliance requirements for US insurers?

    1/. Yes.

    2/. No. It's a total red herring however.



    p.s. Post #82 above. I'm still awaiting your response.


  • Options
    #87
    peteb2
    Registered Users Posts: 1,813 ✭✭✭peteb2


    Henry Ford III wrote: »
    1/. Yes.

    2/. No. It's a total red herring however.



    p.s. Post #82 above. I'm still awaiting your response.

    I don't see post numbers on a mobile device. Limited to 1.3m on commercial policies and 30m on private cars. But a rarity to see in the millions.


  • Options
    #88
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,711 Mod ✭✭✭✭Henry Ford III


    peteb2 wrote: »
    I don't see post numbers on a mobile device. Limited to 1.3m on commercial policies and 30m on private cars. But a rarity to see in the millions.

    So your €5000 car can potentially incur a liabilty of up to €30,000,000. Hardly a trifling matter.

    How would you feel about an innocent person who was badly injured by a Setanta policyholder and who might be unable to obtain compensation for their injuries?

    The actions of Brokers can be surprisingly far reaching.


  • Options
    #89
    peteb2
    Registered Users Posts: 1,813 ✭✭✭peteb2


    Henry Ford III wrote: »
    So your €5000 car can potentially incur a liabilty of up to €30,000,000. Hardly a trifling matter.

    How would you feel about an innocent person who was badly injured by a Setanta policyholder and who might be unable to obtain compensation for their injuries?

    The actions of Brokers can be surprisingly far reaching.

    Negligence of a driver is hardly a brokers fault.


  • Options
    #90
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,711 Mod ✭✭✭✭Henry Ford III


    peteb2 wrote: »
    Negligence of a driver is hardly a brokers fault.

    No, but placing a potentially huge risk with a financially wobbly insurer is.


  • Advertisement
  • Options
    #91
    Corvo
    Registered Users Posts: 3,694 ✭✭✭Corvo


    Henry Ford III wrote: »
    No, but placing a potentially huge risk with a financially wobbly insurer is.

    Yet even the most experienced of brokers would have seen many an insurer pull out of a market and would have treated this one the exact same.

    You're striving to find fault with the brokers here it seems and it has been outlined in various posts on various threads as to why it isn't.


Advertisement