The anomaly of denying chartered insurance brokers’ fee must be corrected
After more than a decade of remaining silent, it looks like the time has come for chartered insurance brokers to be heard of the wrongs that have been perpetuated against them.
Whereas in other countries, these brokers are recognised as professionals, and receive fees for their services, in Ghana this does not happen because the law does not make provision for these professionals to be paid for their work. They are expected to do their work pro bono. But these are people with families and have personal issues to deal with. How they are expected to make money with what they have studied beats my imagination.
The Insurance Act, 2006 (Act 724) and the Insurance Regulations, 2012 (L.I. 2234) govern the insurance industry in Ghana. However, these laws do not provide for the payment of fees to brokers for their services. This has resulted in brokers relying on commissions from insurance companies, which can be inconsistent and unpredictable.
Either it was an oversight at the time the policies were being made to guide the insurance business in the country, or simply an attempt to deny the professionals in this sector what is rightly due them. Somehow too, it is possible that professionals in the insurance industry were not involved in putting these policies together. For this reason, the time has come to correct some of the ways that insurance professionals have been cheated in the country for so long.
It is sad to point out that whereas other professionals, accountants, lawyers, architects, medical doctors, engineers, carpenters, communications experts charge professional or consultancy fees for their services, in Ghana, the insurance brokers are prohibited from collecting fees for advising clients on risk management. It is like it is taken for granted that whatever advice they give is not necessary or does not deserve to be paid for. The truth is that they have been trained to do a particular work, and it is their advice that will help a client take a decision or help him or her in any insurance situation.
The situation we have now, is akin to saying that, when you enter the chamber of any lawyer and talk to him about a problem you want him to solve, he should not demand payment for the time he spent with you. It is worrying for the insurance professionals because they are expected to provide the best advice, yet they get nothing for it. The big question is how are they supposed to survive?
Another anomaly that need to be looked at is the fact that, chartered insurance brokers do not receive fees for negotiating claims on behalf of policyholders who have suffered losses. This sad situation is perplexing, especially to think of the fact that lawyers, who may not have received training in insurance, are paid fees for negotiating claims. This raises questions about fairness, equity, and the value of specialised expertise. It truly does not make sense that the professional who negotiates claims is denied payment whereas, lawyers simply come in to be paid for whatever service they offer in any claim related issue.
It is against this background that one would like this issue to be properly looked into. The brokers definitely need to receive fees for what they do. This is because they have the specialised expertise in dealing in these matters. They have in-depth knowledge of insurance principles, practices, and regulations, making them uniquely qualified to provide expert advice and services.
In addition, the brokers provide valuable services, including risk assessment, policy selection, and claims negotiation, which warrant fair compensation. It is for this reason that if they are allowed to charge fees for their services, they would be able to improve professionalism in their work, as well be encouraged to maintain high standards of service and expertise.
The time has therefore come for some reform to be put in place to address the anomaly. In the first place, the Insurance Act and Regulations should be reviewed and revised to recognize the value of Chartered Insurance Brokers’ services.
Specifically, it must allow chartered brokers to collect reasonable fees for their services, including risk management advice and claims negotiation. This must be guided by regulations to guide fees to be charged ensure transparency, fairness, and consistency across the industry.
Reforming the insurance laws to allow these brokers to charge fees would have several benefits, including getting them incentivized to provide high-quality services, knowing that they would be fairly compensated. In addition, this will reform the insurance laws in the country to align it with international best practices, where insurance brokers are recognized as professionals and receive fees for their services.
It is essential that stakeholders, including the government, insurance companies, and brokers, come together to review and revise the relevant laws and regulations to create a more equitable and sustainable insurance industry in the country. Otherwise, the brokers who have for a long not seen any benefit from what they do as work, may pretend to be working, and the public will be at the losing end because, the advice they get may just not be quite what it should be.
The writer is a Chartered Insurance Practitioner.
BY RICHARD YAO FENUKU- DOAMEKPOR
