Fact sheet 17
Our policy on fees for scheme insurance Yoga-Link, Care-Sure and Care-4
Q. What fees are chargeable?
We charge a policy fee of between £15.00 to £50.00 for new business, mid-term adjustments or reinstatements depending upon the range of activities/cover provided. At renewal the policy fee reduces by £10.00 because the set-up element is not repeated while cover remains continuous. Various supplementary covers carry a £5.00 to £10.00 fee, as do any circumstances when replacement documentation has to be issued.
Q. Why are fees necessary?
There is a marked difference in the work undertaken for arranging a single policy with an insurer who issues the all documentation and the work we do in administering our scheme insurance. Here we take on many of the insurer’s responsibilities as well our own broker’s duties but the premiums are still passed to the insurers who need to hold substantial reserves in order to deal with claims.
Q. Isn’t the commission earned sufficient?
No it isn’t. The purpose of an affinity scheme is to allow the purchasing power of many like-minded people to drive down the unit costs for the benefit of all. The premiums are then heavily discounted by the insurers and in return the bulk of the actual work is done by the handling broker. We receive varying commissions of up to 25% of premiums (exclusive of 6% insurance premium tax). However, we usually earn less than £10.00 per case in commission terms.
Q. Wouldn’t £10.00 cover an individual’s dealings for a year?
Again the answer is no. We are not simply issuing quotations, collecting monies and issuing schedules/certificates. We are sometimes involved with very complex queries that can arise from what might at first appear to be a routine enquiry. 2 or 3 reminders have sometimes to be issued before some clients respond to correspondence, often for genuine reasons. Additionally, we are continually answering questions that crop up throughout the year in connection with possible or actual claims, queries on the nature of cover, policy extensions, validating qualifications and explaining or interpreting different policy wordings etc.
Finally, remember that we are in business with office and staffing costs, as well as regulatory and professional fees. Our charges have been carefully structured to ensure that we can provide a dedicated service, offering all manner of advice on insurance and sometimes too on non-insurance related matters, to all of our clients equally, regardless of the level of premium paid.