The government has agreed a pledge with five insurance brokers which could mean thousands of leaseholders in buildings with identified fire safety issues see a significant reduction in premiums.
Each broker is committing to stop the practice of sharing commissions with those parties who place or arrange buildings insurance, such as property managing agents, landlords, and freeholders.
They are also promising to have a cap of 15 per cent on the proportion of the premium that brokers take to compensate for their work in arranging the insurance.
The Financial Conduct Authority report on broker remuneration found that this amount can be as high as 60 per cent of the cost of the premium paid by leaseholders.
Minister for Building Safety, Lee Rowley, says: “These brokers are to be congratulated on their decision; we now need to see further action from others in the broader insurance and broker industry to accompany it.”
The brokers that have individually taken the voluntary decision to sign up to the pledge are: Lockton LLP, Bridge Insurance Brokers , Brown & Brown Insurance Brokers (UK) Limited, PIB Group Insurance Brokers/ St Giles, and Willis Limited (WTW).
The pledge will benefit leaseholders who are living in buildings over four storeys or 11 metres in height with identified fire safety defects, which have been made known their insurance brokers.
The brokers who have signed up to the pledge have also confirmed their commitment under new FCA rules, from December 31 this year, to share information about the buildings insurance policy with leaseholders if requested.
These companies will act with immediate effect for new policies and the Government will monitor the adherence to and impact of the pledge.
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