BIBA launches premium finance guide

The British Insurance Brokers’ Association has launched a guide for members that arrange premium finance for customers.

The new guide, launched today by BIBA CEO, Graeme Trudgill, in his opening address at the association’s annual conference, aims to help members demonstrate fair value in the provision of premium finance.

There can be substantial benefits for both consumers and businesses in spreading the costs of their premiums over the year. Using this guide in conjunction with the Fair Value Assessment Framework produced by economics consultancy, Oxera, for BIBA, will give additional support to members in demonstrating fair value on the work they do as credit brokers when arranging premium finance.

“Premium finance helps customers who, for whatever reason, prefer not to pay their premiums up-front. However, there are costs to doing this,” Trudgill said. “This guide helps to explain how premium financing works and why customers may need to pay more to spread their payments.”

BIBA’s new guide highlights brokers’ regulatory obligations including what needs to be disclosed alongside some useful points to consider when offering premium finance.

David Sparkes, BIBA regulation director explained: “We wanted to give members the confidence to show that they are offering fair value to their customers when suggesting premium finance products. We hope that once customers understand the costs incurred by the lenders in offering the finance and the work done by the broker in offering and managing the service throughout the life of the loan, they will see the value such arrangements bring.”

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