Did you know that as a property managing agent you may need to be regulated by the Financial Conduct Authority if you are arranging insurance on behalf of your clients?
In fact, agents providing financial advice or arranging insurance on behalf of landlords, without the correct authorisation to do so, could face fines of up to £25,000.
We understand that as a managing agent responsible for a block of flats or property portfolio, it is often easier and more cost effective to insure all the residents in one go, and whilst it is perfectly acceptable to source insurance quotes and documents on behalf of clients who have expressed an interest in insuring their property, if you arrange cover on that person’s behalf then you must be regulated by the FCA.
Steve Jones, managing director of Rentguard, said:
“If you are not sure whether you should be regulated or not, as a rule of thumb, if the service you provide goes beyond gathering information for the client, and involves handling money, renewals, paperwork or contracts on behalf of the client, then you may need to be regulated,”
If a property manager is involved in the claims process and only provides information to help the property owner make a claim, then they will not be considered to be 'assisting in the performance of the contract of insurance' and so will not need to be regulated for this.
However, we know from experience that property managers, keen to go the extra mile for their customers sometimes take on responsibility on behalf of the property owner for making an insurance claim. And will even complete the claim form and provide the technical information and details of the circumstances leading to the claim.
Where this is the case, the property manager may be assisting in both the administration and performance of a contract of insurance and should be regulated accordingly.
