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Life offices refute claims of clawback blundering

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&#39s figures do not seem to fit with

our experience. Some 99 per cent of our commission is dealt with on an

automated basis.”

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.”

Perspective, p20

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