ON the remittance of funds by brokers to insurers, the Assoication of Trinidad and Tobago Insurance Companies (ATTIC) has gotten the Central Bank of Trinidad and Tobago (CBTT) to put pressure on the brokers to try ensure they collect their premiums on time.
So CBTT has expressed concern to the Insurance Brokers Association of Trinidad and Tobago (IBATT) that the insurance brokers are not remitting monies they have collected to pay insurers within the ten-day period stipulated in the new insurance act and that there are large amounts outstanding from various brokers that are supposed to be paid to insurers that have been paid to those brokers.
IBATT responded to the CBTT rejecting their insinuation and it must be pointed out that brokers are feeling that ATTIC is using the CBTT to put pressure on brokers to squeeze them out of the market and the industry.
Brokers believe the CBTT keeps moving the goalpost on the brokers as the rules and regulations being put on them are one-sided and only benefits the insurers. The brokers have faced many new rules and regulations with increased compliance cost and continued professional development (CPD) requirements cost where the smaller brokers (and even mid-size ones) are finding it difficult to make ends meet.
Yet the CBTT is not bending to simple requests from IBATT. They would not allow electronic motor certificates for the market, they continue to allow a property “cartel-like” agreement on property rates across the market and brokers are finding it hard to keep their heads above water.
With increased mounting cost the local bankers are refusing to change an automated clearinghouse (ACH) payment system that leaves brokers’ accounts forever searching for payments. ACH is known as “direct payments.” ACH payments are a way to transfer money from one bank account to another without using paper checks, credit card networks, wire transfers or cash. Not allowing electronic cheque deposit systems, and constantly dealing with increased expenses such as having to pay to deposit cash and pay to withdraw cash is taking a toll on margins for these brokers’ business.
IBATT feels that these are the inefficiencies that CBTT should be focusing on, not constantly implementing more rules and dancing brokers from ATTIC to Ministry of Finance.
It’s coming down to the point where insurers will not need brokers anymore once they establish that link to directly deal with the broker’s clients, they will no longer need nor respect the brokers thus eventually forcing them out of the market. It’s an untenable situation
Insurers and CBTT have demonstrated their inability to listen to the brokers association and their membership concerning the “cartel-like” arrangement and constantly ignore the fact that the insurance companies accounts are a mess as well, where many are unable to properly reconcile their accounts.
Under the new regulations, the insurance companies already have the power where brokers cannot deduct their commissions for health, life or long-term Insurance clients when paying premiums across to the insurers and yet there is no provision in the new act on when insurance companies must pay commissions to the brokers.
Many insurers take months to pay brokers back their commissions. They are now insisting that the brokers’ clients pay the insurance companies directly and then are unable to state when they received the funds.
Brokers have to constantly show proof to the insurers from their clients, that these payments were made by direct transfer ACH to their accounts. Many insurers never seem to be able to identify these payments in a timely manner and sometimes suspend coverage of the client’s health plans. Why are these “hold” accounts not being reconciled properly? Money brokers can’t collect from delinquent clients and advise insurers of the situation are never removed from some Insurer’s statements leaving incomprehensible statements and showing brokers as delinquent as well.
Many times payments are paid by the brokers’ clients directly to the insurers and the brokers are never notified nor are they given the commissions unless they are notified directly from the client.
Insurers have taken advantage of brokers for too long in this market and brokers are upset and are requesting that the CBTT do not enforce more regulations that they consider unfair and only benefit the insurance companies in the market. They have been speaking to the CBTT for the last four years or so but they feel their voices are falling on deaf ears.
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.
Commentary: Insurers Using Central Bank against Brokers
ON the remittance of funds by brokers to insurers, the Assoication of Trinidad and Tobago Insurance Companies (ATTIC) has gotten the Central Bank of Trinidad and Tobago (CBTT) to put pressure on the brokers to try ensure they collect their premiums on time.
So CBTT has expressed concern to the Insurance Brokers Association of Trinidad and Tobago (IBATT) that the insurance brokers are not remitting monies they have collected to pay insurers within the ten-day period stipulated in the new insurance act and that there are large amounts outstanding from various brokers that are supposed to be paid to insurers that have been paid to those brokers.
IBATT responded to the CBTT rejecting their insinuation and it must be pointed out that brokers are feeling that ATTIC is using the CBTT to put pressure on brokers to squeeze them out of the market and the industry.
Brokers believe the CBTT keeps moving the goalpost on the brokers as the rules and regulations being put on them are one-sided and only benefits the insurers. The brokers have faced many new rules and regulations with increased compliance cost and continued professional development (CPD) requirements cost where the smaller brokers (and even mid-size ones) are finding it difficult to make ends meet.
Yet the CBTT is not bending to simple requests from IBATT. They would not allow electronic motor certificates for the market, they continue to allow a property “cartel-like” agreement on property rates across the market and brokers are finding it hard to keep their heads above water.
With increased mounting cost the local bankers are refusing to change an automated clearinghouse (ACH) payment system that leaves brokers’ accounts forever searching for payments. ACH is known as “direct payments.” ACH payments are a way to transfer money from one bank account to another without using paper checks, credit card networks, wire transfers or cash. Not allowing electronic cheque deposit systems, and constantly dealing with increased expenses such as having to pay to deposit cash and pay to withdraw cash is taking a toll on margins for these brokers’ business.
IBATT feels that these are the inefficiencies that CBTT should be focusing on, not constantly implementing more rules and dancing brokers from ATTIC to Ministry of Finance.
It’s coming down to the point where insurers will not need brokers anymore once they establish that link to directly deal with the broker’s clients, they will no longer need nor respect the brokers thus eventually forcing them out of the market. It’s an untenable situation
Insurers and CBTT have demonstrated their inability to listen to the brokers association and their membership concerning the “cartel-like” arrangement and constantly ignore the fact that the insurance companies accounts are a mess as well, where many are unable to properly reconcile their accounts.
Under the new regulations, the insurance companies already have the power where brokers cannot deduct their commissions for health, life or long-term Insurance clients when paying premiums across to the insurers and yet there is no provision in the new act on when insurance companies must pay commissions to the brokers.
Many insurers take months to pay brokers back their commissions. They are now insisting that the brokers’ clients pay the insurance companies directly and then are unable to state when they received the funds.
Brokers have to constantly show proof to the insurers from their clients, that these payments were made by direct transfer ACH to their accounts. Many insurers never seem to be able to identify these payments in a timely manner and sometimes suspend coverage of the client’s health plans. Why are these “hold” accounts not being reconciled properly? Money brokers can’t collect from delinquent clients and advise insurers of the situation are never removed from some Insurer’s statements leaving incomprehensible statements and showing brokers as delinquent as well.
Many times payments are paid by the brokers’ clients directly to the insurers and the brokers are never notified nor are they given the commissions unless they are notified directly from the client.
Insurers have taken advantage of brokers for too long in this market and brokers are upset and are requesting that the CBTT do not enforce more regulations that they consider unfair and only benefit the insurance companies in the market. They have been speaking to the CBTT for the last four years or so but they feel their voices are falling on deaf ears.
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.