The warning comes as a result of the collapse of Tribune Risk and Insurance Services, the Scottish underwriting agency which has left more than 40,000 customers without insurance cover. An investigation has revealed that Tribune collected premiums from sub-brokers but never placed cover. Pricewaterhousecoopers, the liquidator appointed to the case, has confirmed that claims worth around £2 million have already been made against Tribune and this figure may well rise further.
Tribune was not a member of The General Insurance Standards Council (GISC), although it did apply for membership earlier in the year and then decided to withdraw its application.
David Quick, Managing Director of CETA, commented: "The collapse of Tribune illustrates how careful agents have to be when selecting a network. Unsustainable businesses with unrealistic commissions and premiums, are bound eventually to fail. This can leave policyholders and agents out of pocket."
When dealing with a network or wholesaler David Quick suggests: "As an absolute minimum requirement, make sure they are GISC members, with a track record of looking after clients and agents. If they are not, you should be asking why and proceed with extreme caution".
