Non-statutory Trust

[Inspector Gadget]

I've just received my house insurance renewal quote from my broker and there is something which is bothering me.
Under the header "Client Account Interest" it states:
WEF 1 August 2006 where arrangements to hold premiums on behalf of the insurer are not in place, we will hold premiums as your agent. All such premiums will be held in a non-statutory trust. The terms of the non-statutory trust mean that we are entitled to use client money held in trust on behalf of one client to pay another clients premiums before the premium has been received from that client."
I've not heard of this before. Any of you guys know what it means?

[mooreda]

you are best to insure with a company direct instead of a broker as I have always found by shopping about you can get a better deal

[Inspector Gadget]

Thanks for the advice, but it doesn't answer my question.

[craigwalton]

I've never heard of this either, but admittedly I am not too strong on Broker terminology.
To me it sounds like
If we do not have an agreement with the Insurance Company [that you are insured with] to take payments on their behalf we will do so, but keep it in a collective pot that we organise. We may pay the premiums for other Clients from this pot.

Firstly check that the Direct Debit is being taken by the broker or the Insurance Company.

If it is the broker then make a quick telephone call to them and ask them "Are they an "agent" ("coverholders" if the policy is underwritten at Lloyds) for the Insurance Company with Authority to collect any premiums due"

Hope this helps!

[Inspector Gadget]

Thanks for that craig. I've found out that there is nothing sinister to worry about. Apparently, as you rightly say, a "pot" is kept for late renewals/direct debits etc. so as to obviate the loss of insurance through such late payments.
Incidentally while I'm at it, the question related to my home insurance renewal, the premium for which was £595 with quotemeunhappy: eek: and
£276 with my chosen provider
Thanks to all for looking.

[xrchris]

To the OP - It is a legal requirement under FSA rules that all client/insurer monies held by an insurance broker are held in a separate 'non-statutory trust' account and is there to protect you.

Originally Posted by mooreda

you are best to insure with a company direct instead of a broker as I have always found by shopping about you can get a better deal

I love proving this wrong and have done so on many occasions. To be honest you can always find a 'cheap deal' but it is not necessarily always a 'good deal'.