If someone wants to introduce non-investment insurance business and receive a commission split, what introducer agreement should be used?
There is a quirk in EU legislation when considering the response to this question as an introducer’s agreement would not be applicable.
Article 2 (3) of the Insurance Mediation Directive sets out ‘insurance mediation’ as activities of introducing, proposing or carrying out other work preparatory to the conclusion of contracts of insurance, of concluding such contracts or of assisting in the administration and performance of such contracts, in particular in the event of a claim.
Article 2 (5) of IMD states ‘insurance intermediary’ means any natural or legal person who, for remuneration, takes up or pursues insurance mediation.
In plain language, this means that introducing non-investment insurance contracts by way of business, ie where there is remuneration paid for that lead, is a regulated activity.
Therefore, the introducer firm would need to be regulated by the FCA or become exempt by becoming an introducer appointed representative of the firm to whom they will introduce the leads.
It is possible to be an introducer appointed representative of more than one firm.
Aileen Lynch is head of technical at Compliance First