Letter from GPI
Dear PCA Members,
We would firstly thank you all for participating in the insurance backed guarantee scheme underwritten by Guarantee Protection Insurance Limited (“GPI”). This can only further the agenda of consumer protection and raise standards of care and professionalism within our industry by demonstrating a readiness to provide a robust consumer care package to property owners.
At this stage we would take the opportunity to provide you all again with the guidance provided by GPI on carrying out insurance activity. This document outlines GPI’s sales process for the PCA insurance backed guarantee product. As GPI are the product provider, the aforementioned sales process is the only one that GPI will condone; and it is presently the only sales process envisaged by GPI for this particular product. No other alternative sales processes shall be permitted by GPI, and the PCA will certainly not support any such alternatives unless directly authorised to do so by GPI. Indeed, if the PCA becomes aware of PCA contractors who practice an alternative sales process other than that prescribed by GPI, the PCA shall notify GPI immediately, who will then take the appropriate legal and regulatory actions necessary to protect its customers, its potential customers and its commercial interests.
The principle objective of the GPI Sales Process is to ensure that PCA contractors do not receive any remuneration in respect of insurance activity. This is of crucial importance because, in accordance with UK law, only firms which are either (a) authorised; or (b) exempt from regulation may carry out regulated activities (for example, insurance) in exchange for remuneration. Carrying out insurance activity for remuneration, without firstly being either authorised or exempt from regulation falls outside of GPI’s sales process for the PCA product and –more importantly- may, in some cases, be a criminal offence. This underscores the importance of adherence to GPI’s sales process.
This being the case, there are a number of basic rules which PCA contractors are expected to follow. The rules are simple and –more importantly- present to the customer a journey that is efficient and in accordance with the insurer’s responsibilities. There is no excuse for not adhering to these rules and GPI’s insurance scheme is set up with these rules in mind. Each of the rules (as well as the sales processes in general) are set out within the document itself, but the more notable rules are as follows:
- In respect of the actual insurance premium: You must only collect –from the customer- the actual insurance premium charged by GPI. In other words, GPI’s insurance products cannot be subject to “markup” or “up-sell” or similar.
- If you charge an administration fee to the customer, in respect of the insurance, this charge must only be the actual reasonable administrative cost for you to arrange the insurance. GPI has determined that a reasonable administrative cost must be no more than £35; but if your actual administrative cost is lower than this, you may only charge the lower amount. The amount of this administrative fee –if taken- is to be declared to GPI, with each insurance submission, and there must be no additional or hidden fees in respect of the insurance.
- You must not make the possibility of an insurance backed guarantee a major feature of your sales proposition. Insurance backed guarantees must remain an incidental and ancillary part of your business.
- You must not demand a higher price for your services, as a result of your ability to offer an insurance backed guarantee.
- You must not use the insurance product to gain a marketing advantage over your competitors.
In addition to the above being self-evident; your contract terms & conditions with GPI binds your business to these simple rules. Not only is there a public law expectation of your conduct; but there is also a contract law obligation on your business as well. This must be kept in mind at all times in your interactions with customers.
Insurance can be a complex area, and it is, rightly, a highly regulated industry. If you, or your customers have any questions regarding the insurance backed guarantees, or the sales process, please direct them to GPI by telephoning 01292 268020 during office hours, or by emailing firstname.lastname@example.org. As the regulated firm, it is GPI’s responsibility to respond to such questions. Neither your business, nor the PCA themselves are permitted to provide insurance advice to your customers only GPI is in a position to do this correctly, in accordance with the financial services regulations and the law. Ultimately, they are there to help, so if you have any questions whatsoever – even ones to which the answer may seem obvious- please do not be tempted to assume knowledge; pick up the phone and give GPI a call.
Resources from GPI for PCA Members
GPI Launch Insurance Backed Guarantee Animation
PCA members are not regulated to sell insurance and we understand how hard it can be trying to explain what an insurance backed guarantee (IBG) is to a homeowner. GPI have launched an IBG animation aimed at explaining the features and benefits of providing a homeowner with an IBG.
New GPI product launched November 2016 – Knotweed Express:
Other GPI downloads:
New product May 2016: GPI Herbicide (only available to PCA Members)