Paymentshield has come under further criticism from rival product providers for axing renewal commission to brokers who are no longer regulated to sell general insurance.
Lee Titcumb, managing director of Centrepoint Insurance Services, says brokers who have sold the pro-ducts in good faith should have their commission entitlements honoured, irrespective of whether they are still regulated.
He says: “Whatever the legal facts of the case, brokers sell insurance products in good faith on the understanding they will receive ongoing commission.
“The revenue they receive helps to fund the costs of compliance and some rely on it as a source of in-come in retirement. Without this assurance, many would not take the time and trouble to sell insurance.”
He says Paymentshield’s decision could not have come at a worse time, following Office of Fair Trading and Financial Services Authority investigations into mortgage payment protection insurance.
He adds: “With insurers working hard to restore confidence in the industry following bad publicity about MPPI, these actions could not have come at a worse time. We hope other firms do not go down this route. At Centrepoint, we will continue to honour our commitments.”
Sue Lambert-Hope, a retired mortgage adviser, is rallying other retired brokers who feel hard done by regarding Paymentshield’s policy. She hopes to take legal action against the company.
But Chris Traynor, sales and marketing director at Payment-shield, says the company stands by its decision.
He says: “If a broker is still authorised to sell insurance we will happily pay their commission. But if a person is no longer authorised and is not in the market they cannot sell or give advice on the product. Therefore they should not be paid the commission.”