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BGP Insurance Services

Is becoming an appointed representative suitable for me?

The AR or ‘Appointed Representative’ is a relatively recent development in the insurance industry. It allows people to more rapidly deploy their knowledge of the marketplace in supporting their customers and in the process, to develop their own brokerage business.  It is a significant departure from the schemes that preceded it – though those continue to be available as well.

Background

Selling insurance is a regulated profession in the United Kingdom. The regulator is known as the Financial Conduct Authority or FCA. Prior to setting up a business as a broker (i.e. someone who sells insurance directly to the end customer) you will need to show that you have specific knowledge and expertise of a type that qualifies you to deal with the public in this area.  The laws and regulations exist for consumer protection and to a certain extent, to maintain the professional reputation and standards of the UK’s globally-admired insurance industry.    

At one time, to run a brokerage business, it was necessary for the individual concerned to demonstrate his or her core competencies directly with the FCA.  It was also necessary for the new entrant to show the existence of a professional framework including:

Capital adequacy
Professional indemnity insurance
Accounting and statutory reporting capabilities

This route to brokerage still exists and is typically called “direct authorisation”.


The appointed representative

There are certain challenges associated with establishing a brokerage through the conventional route.  Those issues are typically related to cost and timeframes – both of which may prove unattractive to a professional looking to move swiftly with their business development plans.

As a result, a revised system was developed, involving a new role referred to as the “Appointed Representative” or ‘AR’.  Its characteristics distinguish it from the FCA/direct authorisation route as follows:

An established insurance organisation acts as a ‘principle’ and it appoints the new individual (or company) as one of its appointed representatives or as its more commonly called, an ‘AR’;

The principle will typically deal with many of the authorisation and FCA approval issues (as they will already have obtained their own FCA approval). This should significantly reduce the lead time associated with the start of your business activities;

They may also be able to deal with any requirements for regulatory reporting and their own capital adequacy provisions typically offset the need for you to find substantial sums of money up front;

The above basic points may apply in most situations. From this point on though, the operating procedures may vary from one principle to another and that’s why it’s imperative that you study the agreement in detail;

You may be able to develop and maintain your own customer portfolio, with the customers remaining yours and not the principle’

You may be able to obtain assistance with your marketing and IT requirements;

Some principles may offer joint product development propositions including direct access to their own underwriters;

In some cases, such as Bennett Gould and Partners, the principle may allow you the freedom to offer solutions from other providers. This might not be the norm however and it’s well worth checking in advance, as is the subject of commissions and fees.

Is it right for you?

Hopefully the above has helped with the first half of your initial question – “what is an AR and is it suitable for me?”
As to its suitability for you, it might be advisable to consider the following questions:

Do you wish to move quickly?
Are you looking for a substantial support structure to assist your business to grow?
Would you prefer to leave things such as statutory reporting to someone else?
Is your own customer portfolio important?

If you answered ‘yes’ to any of the above then it might be worthgiving us a call for more information on joining the BGP AR network, simply contact us.


Is being an appointed representative suitable for me?

The AR or ‘Appointed Representative’ is a relatively recent development in the insurance industry. It allows people to more rapidly deploy their knowledge of the marketplace in supporting their customers and in the process, to develop their own brokerage business.  It is a significant departure from the schemes that preceded it – though those continue to be available as well.

Background

Selling insurance is a regulated profession in the United Kingdom. The regulator is known as the Financial Conduct Authority or FCA. Prior to setting up a business as a broker (i.e. someone who sells insurance directly to the end customer) you will need to show that you have specific knowledge and expertise of a type that qualifies you to deal with the public in this area.  The laws and regulations exist for consumer protection and to a certain extent, to maintain the professional reputation and standards of the UK’s globally-admired insurance industry.    

At one time, to run a brokerage business, it was necessary for the individual concerned to demonstrate his or her core competencies directly with the FCA.  It was also necessary for the new entrant to show the existence of a professional framework including:

Capital adequacy
Professional indemnity insurance
Accounting and statutory reporting capabilities

This route to brokerage still exists and is typically called “direct authorisation”.


The appointed representative

There are certain challenges associated with establishing a brokerage through the conventional route.  Those issues are typically related to cost and timeframes – both of which may prove unattractive to a professional looking to move swiftly with their business development plans.

As a result, a revised system was developed, involving a new role referred to as the “Appointed Representative” or ‘AR’.  Its characteristics distinguish it from the FCA/direct authorisation route as follows:

An established insurance organisation acts as a ‘principle’ and it appoints the new individual (or company) as one of its appointed representatives or as its more commonly called, an ‘AR’;

The principle will typically deal with many of the authorisation and FCA approval issues (as they will already have obtained their own FCA approval). This should significantly reduce the lead time associated with the start of your business activities;

They may also be able to deal with any requirements for regulatory reporting and their own capital adequacy provisions typically offset the need for you to find substantial sums of money up front;

The above basic points may apply in most situations. From this point on though, the operating procedures may vary from one principle to another and that’s why it’s imperative that you study the agreement in detail;

You may be able to develop and maintain your own customer portfolio, with the customers remaining yours and not the principle’

You may be able to obtain assistance with your marketing and IT requirements;

Some principles may offer joint product development propositions including direct access to their own underwriters;

In some cases, such as Bennett Gould and Partners, the principle may allow you the freedom to offer solutions from other providers. This might not be the norm however and it’s well worth checking in advance, as is the subject of commissions and fees.

Is it right for you?

Hopefully the above has helped with the first half of your initial question – “what is an AR and is it suitable for me?”
As to its suitability for you, it might be advisable to consider the following questions:

Do you wish to move quickly?
Are you looking for a substantial support structure to assist your business to grow?
Would you prefer to leave things such as statutory reporting to someone else?
Is your own customer portfolio important?

If you answered ‘yes’ to any of the above then it might be worthgiving us a call for more information on joining the BGP AR network, simply contact us.



Is being an appointed representative suitable for me?

The AR or ‘Appointed Representative’ is a relatively recent development in the insurance industry.
It allows people to more rapidly deploy their knowledge of the marketplace in supporting their customers and in the process, to develop their own brokerage business.  It is a significant departure from the schemes that preceded it – though those continue to be available as well.

Background

Selling insurance is a regulated profession in the United Kingdom. The regulator is known as the Financial Conduct Authority or FCA. Prior to setting up a business as a broker (i.e. someone who sells insurance directly to the end customer) you will need to show that you have specific knowledge and expertise of a type that qualifies you to deal with the public in this area.  The laws and regulations exist for consumer protection and to a certain extent, to maintain the professional reputation and standards of the UK’s globally-admired insurance industry.    

At one time, to run a brokerage business, it was necessary for the individual concerned to demonstrate his or her core competencies directly with the FCA.  It was also necessary for the new entrant to show the existence of a professional framework including:

Capital adequacy
Professional indemnity insurance
Accounting and statutory reporting capabilities

This route to brokerage still exists and is typically called “direct authorisation”.

The appointed representative

There are certain challenges associated with establishing a brokerage through the conventional route.  Those issues are typically related to cost and timeframes – both of which may prove unattractive to a professional looking to move swiftly with their business development plans.

As a result, a revised system was developed, involving a new role referred to as the “Appointed Representative” or ‘AR’.  Its characteristics distinguish it from the FCA/direct authorisation route as follows:

An established insurance organisation acts as a ‘principle’ and it appoints the new individual (or company) as one of its appointed representatives or as its more commonly called, an ‘AR’;

The principle will typically deal with many of the authorisation and FCA approval issues (as they will already have obtained their own FCA approval). This should significantly reduce the lead time associated with the start of your business activities;

They may also be able to deal with any requirements for regulatory reporting and their own capital adequacy provisions typically offset the need for you to find substantial sums of money up front;

The above basic points may apply in most situations. From this point on though, the operating procedures may vary from one principle to another and that’s why it’s imperative that you study the agreement in detail;

You may be able to develop and maintain your own customer portfolio, with the customers remaining yours and not the principle’

You may be able to obtain assistance with your marketing and IT requirements;

Some principles may offer joint product development propositions including direct access to their own underwriters;

In some cases, such as Bennett Gould and Partners, the principle may allow you the freedom to offer solutions from other providers. This might not be the norm however and it’s well worth checking in advance, as is the subject of commissions and fees. 

Is it right for you?

Hopefully the above has helped with the first half of your initial question – “what is an AR and is it suitable for me?”
As to its suitability for you, it might be advisable to consider the following questions:

Do you wish to move quickly?
Are you looking for a substantial support structure to assist your business to grow?
Would you prefer to leave things such as statutory reporting to someone else?
Is your own customer portfolio important?

If you answered ‘yes’ to any of the above then it might be worthgiving us a call for more information on joining the BGP AR network, simply contact us.

 

© Bennett Gould & Partners Ltd 2018


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© Bennett Gould & Partners Ltd 2018


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BGP is a trading name of Bennett Gould & Partners Ltd., Registered in England No 1058351 at Corinium House, Corinium Avenue, Gloucester GL4 3HX, and are authorised & regulated by the Financial Conduct Authority (FCA). Our FCA register number is 306850 and you can check this on the FCA’s register by visiting the FCA’s website www.fsa.gov.uk/register/home.do or by contacting the FCA on 0800 111 6768.