Commercial Lines Innovation of the Year - Stuart Alexander

Sponsored by Allianz Cornhill.

Stuart Alexander won the judges over in this section by the way in which it turned Financial Services Authority (FSA) regulation into an opportunity to bring something new to the market, becoming the first broker in the UK to launch a network of appointed representatives for property management agents (PMAs).

Stuart Alexander recognised that, as secondary markets, many property owners, and especially PMAs, would fall under the scope of the FSA. It also recognised that many of these PMAs were facing regulation for the first time and, as insurance is only a secondary part of their business, many were concerned about the knowledge required and the costs involved.

As such, the broker took the early decision to create a network of appointed representatives for the property industry, to support both its existing customer base and new clients. This would be able to provide a fully integrated support service to PMAs and allow them to continue to operate regulated activities without having to become directly authorised. It would also ensure that consumers' interests would be fully protected.

Stuart Alexander conducted thorough research before taking the new network to market. It began by talking to a selection of existing clients, assessing their knowledge of FSA regulation, establishing what professional organisations they belonged to and what their own personal requirements were. Following the initial research, it consulted the Association of Residential Managing Agents and Royal Institute of Chartered Surveyors, which both agreed that Stuart Alexander's network offering would benefit some of their members.

In order to achieve a robust compliance process, the broker obtained legal advice and consulted directly with the FSA, as well as using its full-time compliance manager. It received financed support for this initiative from IFAct (regulatory consultants) to assist on repairing quality procedures, documentation, carrying out due diligence on prospective members, training, competency procedures, and the provision of compliant recordkeeping and monitoring programmes.

The network was finally launched on 1 March 2004, making Stuart Alexander responsible and accountable for the compliant practices of appointed representatives.

All controlled-function office-holders are required to undergo a thorough due diligence process and pass appropriate tests after an induction course.

This process fulfils the 'fit and proper' test prior to being submitted to the FSA for authorisation approval. The appointed representatives will be arranging insurance contracts for commercial customers and will only have access to the insurer panel operated by Stuart Alexander.

By the end of May this year, 25 PMAs had signed up to the network, representing £2.5m in annual premium. Much more is expected to come.

However successful the initiative proves to be, Stuart Alexander has certainly helped raise awareness of the issue of regulation for secondary intermediaries - and set a fantastic example of how a proactive and enterprising broker can adapt to whatever the FSA throws at them.

AWARD SHORTLIST

The Moorhouse Group

Midway Insurance Services.