Disclosure poser

I suppose the easy answer is to handle all future transactions on a fee basis. John Tiner's statement caught the provincial market off guard, as the feeling was, that with the introduction of the British Insurance Brokers' Association suggested wording in terms of business agreement's there was sufficient transparency to satisfy the regulator. Such a wording, or similar, will at least send a signal that you are open to disclosure, as of course you must be anyway.

I suspect that your firm, like most others, will confirm that commercial clients who pay on a commission basis rarely ever ask how much you receive. Apart from the regulatory aspect, you might give some thought to commercial implications. In the prevailing soft market conditions, by obtaining for your clients a cheaper premium at renewal, you are, on a commission basis, reducing your own income.

Strategically, and without doing anything that might affect your Treating Customers Fairly policy, you could consider moving to a fee basis with all clients above a certain size. Easy to say, and the problem for most brokers, is the one of putting a value on time expended. The irony is that brokers can be held as professionally liable for wrongful advice as solicitors and accountants, but in many cases, the client has not actually paid a fee for the advice. The reward has come from the percentage paid by the insurer to the broker.