MORE than 18 months ago an agreement has been formed by local insurers to fix the purchase or selling price of products sold by insurance companies, especially property rates for Trinidad and Tobago.
The brokers in T&T and their clients are not very pleased with this “cartel-like agreement” where insurers advised brokers of the following changes in pricing especially since any cost increase at this time impacts customers significantly.
Insurers have advised that property rates would be increased by 10% at renewal of the policies .
According to the “cartel-like agreement” if brokers or clients try to get better pricing from competing insurers, competing insurers are bound by the agreement to quote at the rates agreed to by the Association of Trinidad and Tobago Insurance Companies (ATTIC) in a rating manual devised by them.
This agreement goes on to enforce that quotations on all new property business must be done by the ATTIC rating manual.
When competing insurers do not stick to the rules of this ATTIC rating manual there can be serious repercussions. If an insurer quotes a rate on property less than what the manual states and where the holding insurer loses the business to the competing insurer who quoted a lower rate, the insurer that loses the business now has the right to complain to ATTIC.
The repercussions are that ATTIC can enforce that the successful insurers that quoted below the established rate will have to withdraw the quote and apply the established rates as agreed to by the manual. So the client can never get the best price for coverage of a property from competing insurers.
Citizens of Trinidad and Tobago seem to be being hit from all angles unable to catch themselves and the major insurance companies now do not care about the customers nor the man on the street plight, only their bottom line. I would like to suggest that this method of operating by the insurers and ATTIC are a direct violation and infringement on the Fair Trading Act Chapter 81:13 as outlined by clause 17(1).
Although brokers have questioned the validity of the agreement to dictate the price and fix the pricing of property insurance. ATTIC is not paying any attention to the brokers or the Insurance Brokers Association of Trinidad and Tobago (IBATT). In fact, ATTIC tried to deflect the questions and insurers are trying to deny any such agreement exists.
I’m also calling on the Central Bank of Trinidad and Tobago to look into this “cartel-like agreement” and challenge them to get to the bottom of this.
By this cartel-like rating agreement, brokers and their customers are being held hostage by insurance companies since they can’t get alternative or more competitive rates for their clients to save them money even though the current insurer may not settle claims properly or the insurer puts on loadings on the policy or attempts to restrict cover by introducing terms that can adversely affect the client.
Even if the insurance company’s service to the client is poor, clients are being held hostage if they try to get competitive quotes from other insurers on the market as those insurers are obliged to give higher rates than what their current insurer offers, sometimes twice as high.
The insurance industry was built on “utmost good faith” and supposed to have integrity and transparency and what the insurers and ATTIC have done is to remove trust and fair market practice for obtaining competitive rates for the brokers and their clients.
This causes adverse effects throughout our industry and the Central Bank as the regulatory body for insurers and brokers must stop hiding its head in the sand and address this situation directly.
In my opinion, it is in contravention of the Fair Trading Act Chapter 81:13 and after the last two years citizens have had to deal with rising food prices, rising gas price, the rising price of transport, to come and hit them now with increased prices for insurance coverage for properties is untenable.
This is being shoved down their throats by the insurance companies and is a terrible thing for the whole industry. Shame on ATTIC for implementing such a close-mouthed agreement that goes against fair market practices.
Neil Gosine is an insurance executive. He is also the treasurer of the UNC and a former Chairman of the National Petroleum Marketing Company of Trinidad and Tobago. He holds a Master’s in Business Administration MBA, BSC in Mathematics and a BA in Administrative Studies. The views and comments expressed in this column are not necessarily those of AZP News, a Division of Complete Image Limited.
‘Cartel-Like Agreement’ Hindering Insurance Brokers
MORE than 18 months ago an agreement has been formed by local insurers to fix the purchase or selling price of products sold by insurance companies, especially property rates for Trinidad and Tobago.
The brokers in T&T and their clients are not very pleased with this “cartel-like agreement” where insurers advised brokers of the following changes in pricing especially since any cost increase at this time impacts customers significantly.
Insurers have advised that property rates would be increased by 10% at renewal of the policies .
According to the “cartel-like agreement” if brokers or clients try to get better pricing from competing insurers, competing insurers are bound by the agreement to quote at the rates agreed to by the Association of Trinidad and Tobago Insurance Companies (ATTIC) in a rating manual devised by them.
This agreement goes on to enforce that quotations on all new property business must be done by the ATTIC rating manual.
When competing insurers do not stick to the rules of this ATTIC rating manual there can be serious repercussions. If an insurer quotes a rate on property less than what the manual states and where the holding insurer loses the business to the competing insurer who quoted a lower rate, the insurer that loses the business now has the right to complain to ATTIC.
The repercussions are that ATTIC can enforce that the successful insurers that quoted below the established rate will have to withdraw the quote and apply the established rates as agreed to by the manual. So the client can never get the best price for coverage of a property from competing insurers.
Citizens of Trinidad and Tobago seem to be being hit from all angles unable to catch themselves and the major insurance companies now do not care about the customers nor the man on the street plight, only their bottom line. I would like to suggest that this method of operating by the insurers and ATTIC are a direct violation and infringement on the Fair Trading Act Chapter 81:13 as outlined by clause 17(1).
Although brokers have questioned the validity of the agreement to dictate the price and fix the pricing of property insurance. ATTIC is not paying any attention to the brokers or the Insurance Brokers Association of Trinidad and Tobago (IBATT). In fact, ATTIC tried to deflect the questions and insurers are trying to deny any such agreement exists.
I’m also calling on the Central Bank of Trinidad and Tobago to look into this “cartel-like agreement” and challenge them to get to the bottom of this.
By this cartel-like rating agreement, brokers and their customers are being held hostage by insurance companies since they can’t get alternative or more competitive rates for their clients to save them money even though the current insurer may not settle claims properly or the insurer puts on loadings on the policy or attempts to restrict cover by introducing terms that can adversely affect the client.
Even if the insurance company’s service to the client is poor, clients are being held hostage if they try to get competitive quotes from other insurers on the market as those insurers are obliged to give higher rates than what their current insurer offers, sometimes twice as high.
The insurance industry was built on “utmost good faith” and supposed to have integrity and transparency and what the insurers and ATTIC have done is to remove trust and fair market practice for obtaining competitive rates for the brokers and their clients.
This causes adverse effects throughout our industry and the Central Bank as the regulatory body for insurers and brokers must stop hiding its head in the sand and address this situation directly.
In my opinion, it is in contravention of the Fair Trading Act Chapter 81:13 and after the last two years citizens have had to deal with rising food prices, rising gas price, the rising price of transport, to come and hit them now with increased prices for insurance coverage for properties is untenable.
This is being shoved down their throats by the insurance companies and is a terrible thing for the whole industry. Shame on ATTIC for implementing such a close-mouthed agreement that goes against fair market practices.
Neil Gosine is an insurance executive. He is also the treasurer of the UNC and a former Chairman of the National Petroleum Marketing Company of Trinidad and Tobago. He holds a Master’s in Business Administration MBA, BSC in Mathematics and a BA in Administrative Studies. The views and comments expressed in this column are not necessarily those of AZP News, a Division of Complete Image Limited.