Insurers wield unfair influence with the FSA

I write with regard to the Financial Services Authority rules on broker payments to third parties, i.e. underwriting agencies. I read with shock and absolute horror part three of the Guide to the FSA Handbook for Small Mortgage and Insur-ance Intermediaries for small brokers - particularly the section on client monies. It appears that, even when an end-broker has unquestionably paid an underwriting agency, if the agency fails to pay the insurer, the broker must pay again!

Civil law has always been about fairness and common sense - how can anyone consider this fair? Protect the client, of course, but surely in these circumstances it should be the insurance company that should honour the policies and accept the loss of non-payment to them. After all it is the insurer that sets up the scheme with underwriting agencies. One could argue that since the FSA will regulate the agency they should take responsibility.

End-brokers should be confident that, provided they pay client monies to FSA-authorised bodies, that should be the end of their obligations.

This seems to me an absolute injustice running contrary to all normal principles of civil law but bears testimony to the influence powerful insurance companies have had on these rules - what do others think of this?

JG Searle, Acclaim Insurance Services.