Central Bank alert over brokers without insurance
INSURANCE brokers, estate agents, motor dealers and accountants are to be probed by the Central Bank after regulators found large numbers of them do not have proper insurance to cover them for claims from consumers.
Regulators did a spot check of 50 brokers that offer insurance, including estate agents who sell insurance, and found that a third of them did not comply with rules requiring them to have professional indemnity insurance.
The Central Bank is so concerned with the findings of the initial probe that it is now to carry out a more comprehensive review of the intermediary sector.
Under law all those who offer insurance must have professional indemnity insurance to cover them for €1m for each claim received in a year.
But 18 firms out of the 50 checked by regulators did not comply with the rules, the Central Bank said yesterday.
The probe found that 10pc did not have cover in place. Others were no longer operating as insurance intermediaries but had not told the Central Bank.
Another seven firms failed to respond to the Central Bank and now face the prospect of enforcement action being taken against them.
Professional insurance indemnity provides cover if a consumer claims to have suffered a loss due to neglig-ence by the firm. An exam-ple would be failing to exe- cute a client's instruction.