Former Network Data ARs who rebroked business face clawback
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Former Network Data appointed representatives who have systematically rebroked life and general insurance business are likely to be pursued for clawback commission, says the Phoenix Group.
Phoenix bought the agencies of Network Data ARs from administrator Baker Tilly in the wake of the network going into administration.
The acquisition of the agencies, or rights, to business channelled through Network Data means Phoenix will be pursued by insurers for clawback commission on policies ARs sold that have been rebroked, lapsed or been cancelled.
In turn, Phoenix has confirmed to ARs that it will be pursuing them for clawback irrespective of whether they received the commission from Network Data in the first place.
As Phoenix has bought these agencies it means it gets paid on renewals as well as clawbacks, although the group says this can be rectified by moving policies to a new network on an individual basis.
The move has raised questions over why Baker Tilly sold the agencies to Phoenix when the ramifications of the acquisition are unclear, particularly in terms of clawback.
Paul Wreford, a director at Phoenix, has instructed a City lawyer to look into whether clawbacks can be enforced because when Network Data went into administration the agreement between ARs and the network ended.
He says: “Brokers who have not been systematically cancelling or rearranging policies have nothing to worry about.
“But I suspect that for those who consistently rebroke business there is a serious possibility they will find themselves responsible for the clawback. They should be worried about their relationships with insurers in the future.”
Mike Robinson, a former Network Data AR and principal of At-Home Mortgage Advice, wrote to the Information Commissioner last week arguing that Baker Tilly did not have the right to sell on agencies or client information.
In his letter Robinson says that although Network Data reserved the right to keep data for compliance purposes in case of a complaint, his contract with the firm stated that clients belonged to him.
Robinson says: “I don’t believe client data is Baker Tilly’s to sell.”
