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Persistency errors show why providers must rethink admin

DBS figures suggest that half of all claw^_back cases pursued by life

offices are false.

More than 1,000 DBS IFAs are using a daily system to check whether their

claw-back cases are bona fide so the sample must be significant. And if

these figures apply nationally, IFAs should be up in arms.

Time and time again in surveys by IFAs and by the regulator, providers

have been found wanting on administration.

To penalise IFAs for “cancelled” policies which have not been cancelled is

utterly reckless at a time when advisers are facing unprecedented pressure

on margins.

For some months, this paper has been running Bungle Busters, which aims to

expose life office blunders. The results underline why providers must get

their own houses in order.

But mistakes made over clawback are of a completely different order. Not

only do they deny IFAs income which is rightly owed to them but providers

are making mistakes in one of the most sensitive areas in financial

services, that of persistency.

The Government and consumer groups have for years used low persistency as

a stick with which to beat the industry. If
this level of clawback

translates into an incorrect perception of rates, then it is
also

damaging IFAs&#39 reputations.

The ABI is working on proposals for accreditation to sort out persistency,

admin and other issues. But individual insurers must get these things right

themselves as
a matter of urgency. Life offices owe a
lot to IFAs

and will still rely on them in future, however dramatically the market

changes. It is time the industry started behaving as if it believed this is

the case.

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