Firms without permission to hold client money.


A firm handling insurance money without client money permission must ensure that it has a written  agreement to hold the insurance monies as  agent of the insurer  (risk transfer). The terms of all insurer TOBAs and binding authority wordings must be reviewed carefully before they are signed and any insurance money is received.  It is vital that those terms and conditions are fully consistent with the firm’s actual operations.  The terms of TOBAs and binder wordings presented by the insurers vary significantly and may not be CASS compliant for the particular circumstances of every firm.

Under SM&CR, the Senior Manager with prescribed responsibility for CASS  has personal accountability for ensuring that their firm complies with CASS 5.2 and that risk transfer  is effective with each and every insurer.


Firms with permission to hold client money


Firms with permission to hold client money must also review insurer TOBAs and binding authority wordings in detail to ensure that they are fully CASS compliant.  Where relevant, terms will need to include clear agreement on commingling of RT funds with client money in the ST/NST and subordination . Terms on the extraction of income also need to be consistent with the assumptions used in the firm’s client money calculation.

Whether the firm has client money permission or not, the Senior Manager with prescribed responsibility for CASS   has personal accountability for ensuring that there is timely, documented review of all insurer TOBAs and binders.


An efficient and effective solution


Broad Reach has developed an efficient process for reviewing insurer TOBAs and Binder wordings.  It includes a carefully designed insurer TOBA checklist and integrated ‘Insurer TOBA Register’ application.  This results in an efficient and effective CASS compliance solution.

After establishing your firm’s CASS operating model we take receipt of pdfs of your Insurer TOBAs.  These are then reviewed using our comprehensive CASS review checklist. On completion of the reviews we provide  a completed Insurer TOBA register and a report of recommended actions to remediate the issues identified.

This service can be provided as a ‘kickstart’ covering your larger insurers by GWP to obtain a priority assessment for the majority of your book  or as a complete service for the whole book. Reports can be provided in pdf or MS Excel format and appropriate training provided to enable your firm to maintain its own Insurer TOBA register on an ongoing basis.

The service can also be provided on  an ongoing subscription basis with all documents and reports stored securely in the cloud.