Neat and orderly? A review of 678 insurance intermediaries

At the time of the review, one out of six intermediaries – 92 in total – had submitted information that was of such poor quality that FI decided to initiate an assessment of possible sanctions. All of the affected intermediaries were given an opportunity to respond to the assessment. Of these, 34 intermediaries sent supplementary information that FI has judged to be satisfactory. The remaining 58 intermediaries have either not responded or demonstrated such serious deficiencies that a sanction is still pending. A list of these intermediaries is presented in Appendix 2.

This report follows up a review of 150 insurance intermediaries conducted in the spring of 2006. The results of the first review were discouraging; 4 out of 5 intermediaries initially did not fulfil the requirements for organisation. In the end, sanctions were applied to 27 insurance intermediaries. FI decided to widen its review to include all intermediaries licensed by FI as a result of the deficiencies that were identified.

This report demonstrates that the standards in the industry have improved since the previous report. One-tenth of the reviewed intermediaries have serious deficiencies, compared to one-fifth in last year's report. FI still considers it be a serious problem that so many intermediaries may be subject to sanctions.

The regulations for insurance intermediaries shall ensure that the intermediaries are serious and have the proper competence and procedures. Since insurance intermediaries frequently handle products that are of considerable financial importance to their customers, for example pension and health insurances, it is particularly important that they are compliant with the regulations. The high percentage of insurance intermediaries in the report that had deficiencies in their documentation is a red flag and FI intends to closely follow the development in the industry.

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