An insurance broker is a provider of professional services, similar to a solicitor or architect. Traditionally, these businesses would trade from a physical location, in your local geographic area. If you wanted to use their services, you’d maybe look in a directory. You could also ask a friend or colleague for a recommendation. Alternatively, you would simply go to the local office, if you knew there was one in your town or city.
With all of these options, you have no way of knowing exactly what level of service you are going to receive. The good news is, that most professional service providers need to have some form of authority to trade. This may be on a voluntary basis or they may not be allowed to operate without this authority.
In years gone by, almost anyone could set up and trade as an insurance broker. This sounds worse than it was in reality. A broker works with insurers, to sell their home, motor and business insurance products. Although it was relatively easy to set up in business as a broker, the insurers were very particular about who they would work with. An insurer only worked with brokers that would agree to meet certain criteria. These could be quite detailed, with good reason. They tended to prevent anyone who was not prepared to act and work in a professional manner, out of the industry.
The industry realised that this needed to be formalised and in 2001, there was a voluntary body formed, the General Insurance Standards Council. This laid down rules and regulations, mainly aimed at protecting the insurance purchasing customer. There were fees to become members. But, there was no obligation on a broker to be a member. On the flip side, most insurers, particularly those providing commercial insurance, would not work with brokers who were not members. In essence, this worked, but not every broker worked to the G.I.S.C. rules.
The UK Government, correctly, decided this was not sufficient and the rules were changed in 2005. The regulator at the time was the Financial Services Authority (FSA). This has changed to the Financial Conduct Authority (FCA). Any business wanted to work as an insurance broker had to be authorised by the FSA to trade. Essentially, it was a licence to operate. Without it, you could not advise on, or sell/promote any insurance products.
These rules and regulations have been altered and changed since 2005, but in essence remain the same.
How can I check if my insurance broker is authorised?
It is highly unlikely that a broker will be trading without authority. If you do wish to check, for whatever reason, you can do so online. Please visit this link, to the Financial Conduct Authority Register. https://register.fca.org.uk/
There are a number of search options available, which should help you to find your insurance brokers details. The first page of the register provides background to the register. There is also a contact us option, where you can put questions directly to the FCA.