TSA engaged with the FSB earlier this year to seek clarity on what is permissible in terms of Intermediary fees above the regulated scale and below is the response we received, paraphrased and shortened for the purposes of this newsletter.

If a service rendered to a client by an intermediary is not an intermediary service, the intermediary can charge the client a fee for that service (as it does not fall within the ambit of the Insurance Acts). However, please note that the definition of “services as intermediary” is very wide and it may be difficult to argue that a service does not fall within the aforementioned definition if that particular service relates to a policyholder. Even though we cannot think of a such a specific service(s), which will fall outside the definition of “service as intermediary”, we cannot say that there may not be such service(s).

Hopefully we will be receiving a bit more clarity on the matter with the release of their discussion paper but it may be interesting to compare your fee structure against this response.

At TSA we have received opinion and taken the view that we should only be handling regulated commission associated with intermediary services together with the insurance premium. Should you have a different requirement though, please contact Greg Smith to discuss further.

Thank you and regards,
The TSA Team

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All information provided in TSA Connect newsletters is intended to inform and explain, but please remember to always check the current terms on policies when considering options and advising clients.