Life offices deny that they are making a huge number of commission
clawback claims in error despite the findings of network DBS.
As reported last week in Money Marketing, DBS discovered that half of
commission clawback claims made to its members were not genuine. The
anomaly was discovered when it set up an online service enabling IFAs to
check on commission daily. The network says the false claims are due to
life office administration blunders.
But Norwich Union, Axa Sun Life and Allied Dunbar all say that the DBS
findings do not bear out their experience and the problem is far smaller
than the network claims.
The life offices are also accused of failing to rectify the clawback
problem although they have had the capability to do so since 1991 when
automatic commission reconciliation became available. Reconciliation is the
process by which IFAs match and check commission debits and credits.
Axa spokesman Graham Bohannon says: “DBS's figures do not seem to fit with
our experience. Some 99 per cent of our commission is dealt with on an
A handful of life offices such as CGU have been installing new systems
which they say will help them monitor clawback.
Aifa director general Paul Smee says: “It really is time that we cracked
this if it is causing a problem for our members. We might make it the
subject of some talks if the DBS findings are true.”
Zifa operations director Peter Jewitt says: “Our commission is fully
automated and we have not noticed a problem on the scale suggested.”