Following the FIA’s successful intervention, the IGF facility is continuing to process cover renewals for intermediaries in the interim as usual.
At this point the IGF is still open for business. There is still uncertainty as to the date of the final closing down of the IGF and what transition periods will be allowed for run off.
However, what is certain is that the regulatory requirement for the IGF will fall away and that the IGF licence as a registered Insure will not be renewed.
The actual guarantee has a 60-day bi-lateral cancellation clause and also makes provision for a 3 year run-off period. The key questions is, “Will some arrangement be made for shortening the run-off period?”
The FIA’s stance on the proposed changes to the premium collection regulations focus on the fact that premium collection is a complex, admin. intensive function, which is key to contractual certainty requiring consistency of approach and not to be used for competitive differentiation.
Inconsistencies are likely to create:
- operational inefficiencies and additional work (e.g. huge systems impact);
- uncertainty and increased potential for error;
- possible grounds for undesirable insurer differentiation and improper anti-selection;
- variable due diligence and approval to collect criteria;
- and many more challenges.
The team have met with a number of insurers where it has been found that there is support for a more consistent approach but this issue is still very much a work in progress from both an operational and strategic perspective.
The SAIA is convening a meeting of members on the 12th July 2018 to specifically discuss the various issues and risks inherent in the proposed changes and have agreed to meet with the FIA following this meeting to assess whether there is the appetite and common ground on which a more consistent approach could be implemented as an industry “self-regulation” regimen.
All of this discussion is sensitive in terms of not contravening any of the principles of the Competitions Commission requirements and any possible solutions will have to be tested accordingly.
In the interim, the IGF is processing renewal applications as usual.
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