Five insurance brokerages in the UK have pledged to cap their fees at 15% and to stop sharing their commissions with the likes of landlords and freeholders amid leasehold buildings insurance reforms.
A report by the Financial Times cited Bridge Insurance Brokers, Brown & Brown Europe (formerly Global Risk Partners), Lockton, PIB Insurance Brokers, and WTW as the companies that have agreed with the government to do the above.
Lee Rowley MP, Parliamentary Under Secretary of State (Local Government and Building Safety), was quoted as saying: “These brokers are to be congratulated on their decision; we now need to see further action from others in the broader insurance and broker industry to accompany it.”
For Rowley, the pledge represents the five firms’ “willingness to do more” in terms of bringing premiums down for leaseholders.
New rules designed to support residential leaseholders in the multi-occupancy buildings insurance market are set to take effect on December 31. Under the new regulations, insurance companies will be mandated to treat residential leaseholders as customers when designing products.
It will also be against the new rules to recommend an insurance policy based on commission or remuneration levels. Additionally, leaseholders must be informed of pricing details such as any commission paid. The goal is to ensure that policies provide fair value to leaseholders.
UPDATE:
The pledge applies to buildings insurance for residential buildings over four storeys or 11 metres in height with identified fire safety issues made known to the broker, e.g. combustible cladding.
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