We have pleasure in setting out below a description of the services that we provide and our policy regarding remuneration services.
In return for the remuneration that we receive, we aim to provide the following services. This list is not exhaustive and may vary depending upon individual circumstances:
In some instances we may use the services of another broker to place your insurance, where it is more advantageous to access a particular insurer through it. We will normally be allowed commission by that sub-broker as a percentage of the premium charged to you, in the same way as we would be by an insurer on a direct basis. If, in addition, a fee is charged by that broker it will be disclosed to you at the time that the insurance is placed. We will disclose to you the name of any such sub-broker that we use in the placement of your insurances in the insurance documentation that is issued to you.
Binding Authorities are contracts which we place with insurers for the benefit of clients seeking some specific classes of insurance. Volume of business under one facility maximises our negotiating power with insurers and streamlines the underwriting process and administration of the policy to your benefit. We are able to bind cover on the insurers’ behalf and in these circumstances we act as both your and the insurers’ agent. In addition, we are sometimes granted a limited authority to settle claims on insurers’ behalf and we will advise you where this is the case.
It should be noted that in providing services under binding authorities, we recognise the potential for conflict of interest in our role as both your and the insurers’ agent. As a company, we have a comprehensive conflict management policy and always look to manage any conflict transparently, by advising you in each case where there is the potential for this to be an issue.
Where insurance is placed under a binding authority, we may receive additional income directly from the insurers in recognition of the services that we provide on their behalf.
Additional income may take the form of a percentage of the premium, an administration fee or, depending upon the insurer’s underwriting results, a profit commission. Profit commission is dependent on the insurer making an underwriting profit on the total of all the risks placed under a binding authority and is not contingent upon the performance of any individual policy on its own. Consequently, this commission is not guaranteed and the net profit can only be determined after all relevant risks have expired and the insurer has taken into account its underwriting costs and expenses. This takes in excess of a year, and usually several years to establish, but where an overall net profit is determined, we may be eligible to receive a percentage of it.
Lycetts is remunerated either by a fee, commission or a combination of both, with commercial clients having the right to request details. In the case of a fee, we will have agreed this with you prior to placing your business.
Commission is calculated as a percentage of the insurance premium that you pay and is allowed to us by the insurer with whom the insurance contract is placed. If we need to make an additional administrative charge, this will be agreed with you at the time.
If we are remunerated solely by a fee, then you will pay the premium net of the commission normally allowed to us by the insurer, or any other parties involved in the placement of the insurance policy. The fee may include the cost of any subsequent policy amendments, or alternatively there may be provision for additional charges to be made as appropriate.
If you ask us to arrange payment by instalments through a finance provider we will receive remuneration from that provider for arranging the transaction. If you pay the premium by credit card an administrative fee will be charged to you.
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