Disclose all commissions, commercial insurance brokers told

General insurers that deal with commercial customers are on notice that they must fully disclose commission payments on request from their clients. In a Dear CEO letter sent on 6 December, Hector Sants, Managing Director Wholesale & Institutional Markets, FSA, noted that while its conflict management study of the sector had revealed that most firms feature a standard clause in their Terms of Business Agreements advising customers of their right to ask for details of any commissions, few had put the necessary systems in place. In consequence, some intermediaries were not revealing all elements of remuneration, in breach of ICOB 4.6.1R. The letter reminds intermediaries of their obligation to disclose all commission paid to associates, which covers affiliated companies and Appointed Representatives, as well as any payments from profit share and similar arrangements, for example, with premium finance companies. In 2007/8 the FSA will review the market to decide if mandatory commission disclosure is necessary to counter any lack of transparency that may be damaging to commercial customers and reducing market efficiency.