A Broker’s View By Paul Carty Deputy Chairman BIPAR EU Standing Committee Director, Head of Broker Services, Coyle Hamilton

Coyle Hamilton ( Established 1903 ) n Ireland’s largest Broker employees n Life and Non-Life business n Established in Dublin, Cork, Belfast, Limerick and London. n Has a Lloyds Broker as a subsidiary

Irish Market Life and Non-Life

Non-Life Premium Income by Class

Ireland’s is a Brokers Market Competition from:- Ô Financial Institutions(Life/Pensions) Ô Post Office(Motor) Ô Directwriters(Motor)

The Economy I

Economy II

Market Concentration (2000) Total €2,693m 100% n AVIVA€669m 25% n AXA€407m 15% n Allianz€346m 12.9%73% n RSA€323m 12% n Eagle Star€216m 8%

Regulated by the Central Bank n In the process of becoming a Single Regulator n The Ingredients:- u Investment Services Directive u Capital Adequacy Directive u Investor Compensation Directive + some Irish “spice” = Regulation in Ireland!

Regulation by Activity Key Elements n Professional Requirements n Information to Clients n “Best Advice” n Registration

Professional Requirements ã General Knowledge and ability(EU & IRL) ã PI Cover (EU & IRL) ã Good repute(EU & IRL) ã Financial Capacity (EU & IRL) ã Segregated Client Account ã Premiums paid to an intermediary is deemed paid to the insurer ã Capital Adequacy ã Contribute to Compensation Fund.

Information to Clients Terms of business must be given to each client prior to providing the first service, a)the name & address etc b)a copy of the firm’s Status; c)a description of the services provided; d)a statement of the basis on which an Intermediary is to charge for its services; e)details of the commissions structure(s), if any, through which the Intermediary is or may be remunerated; f)policy in relation to conflicts of interest; j)confirmation of membership of a compensation scheme etc.

EU’s “Best Advice” is Ireland’s “Client’s Best Advantage” n An Intermediary must ensure that it acts to the best advantage of its clients. Arising from this requirement Intermediaries must, taking all relevant factors into account, recommend for each client the most suitable product available, regardless of whether or not the Intermediary holds an appointment in writing from the relevant product producer.

“Reason Why” Before recommending a transaction to a client, an Intermediary must take all reasonable steps to ensure the client understands the risks involved. An Intermediary should prepare a statement of the reasons why a product is considered suitable for the client and why a transaction is considered to be in the best interests of the client. A copy of this statement should be given to the client and the firm should retain a copy. The Intermediary should endeavour to have the client sign this statement.

What are the lessons? n The EU will shape your Regulatory environment n Giving information to clients is not a problem and can be positive n the Single Market whilst a legal reality has not become a reality for most clients n The EU experience is a shared experience