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Litigation mitigation

Recent missives from my host network have reminded me of the days when I worked as an appointed representative of the now-disembowelled Guardian Royal Exchange.

In the mid-90s it introduced a so-called “quality sales unit” to which every piece of business was submitted to undergo the most intense, nit-picking scrutiny imaginable.

Cases were rejected for the most idiotic reasons and the unit quickly became known as the business prevention unit.

I remember a particular case being rejected because I had sold a male client (in his early 40s, married with four young children, hazardous pursuit enthusiast) £1,200 too much life cover. In another case a client in his early 30s with two young children desperately needed the critical illness policy I had recommended to cover his mortgage.

However, the sale was rejected because it meant he would now have too much life cover by virtue of it being a life-and-critical policy.

The people who manned this unit tried to convince me that I should avoid over-insuring this breadwinner by selling standalone critical illness cover, even though in this case it would have been more expensive.

Until any sale had managed to successfully negotiate this ridiculous obstacle the business remained unprocessed. Vulnerable clients were left unexposed and uninsured while ivory-tower jobsworths argued over trivial transgressions of quality sales procedures.

I finally realised that the lunatics had taken over the asylum when I was instructed (as a sole trader working from my back bedroom) that I had to write a letter to myself telling me what my job was.

After confirming with Guardian that this was indeed a serious regulatory requirement I duly complied. Within 12 months of the start of the quality sales regime, Guardian disbanded its appointed representative network because it was losing too much money. Now my host network seems to have become infested by this same manic “cover your back” paranoia.

A recent email hints at case-by-case scrutiny in a new, improved “compliance” regime. I am also informed that yet another revised factfind is on its way – and that I will be forced to use it whether I like it or not.

Of course, most of this nonsense has nothing to do with complying with the FSA rules and everything to do with litigation mitigation. I would feel a lot better if it admitted as much. Why do I get the feeling I&#39ve been here before?

Ivan A Hargreaves

Clitheroe, Lancashire

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