Remuneration Arrangements ROI – Sparrow Insurances Ltd.

We, Sparrow Insurances Limited, act as intermediary (Broker) between you, the consumer, and the product provider with whom we place your business.

The background

Pursuant to provision 4.58A of the Central Bank of Ireland’s September 2019 Addendum to the Consumer Protection Code, all intermediaries, must make available in their public offices, or on their website if they have one, a summary of the details of all arrangements for any fee, commission, other reward or remuneration provided to the intermediary which it has agreed with its product producers.

What is commission?

For the purpose of this document, commission is the payment earned by the intermediary for work undertaken on behalf of both the provider and the consumer.   The amount of commission is generally directly related to the quantity or value of the products sold. We are remunerated by commission and other payments from product producers. When assessing products, we will consider the different approaches taken by product providers in terms of them integrating sustainability risks into their product offering. This will form part of our analysis for choosing a product provider.

There are different types of commission models:

Single commission model: where payment is made to the intermediary shortly after the sale is completed and is based on a percentage of the premium paid.

Indemnity commission

Indemnity commission is the term used to describe a commission payment made before the commission is deemed to be ‘earned’. Indemnity commission may be subject to a clawback (see below) if the consumer lapses or cancels the product before the commission is deemed to be earned.

Other forms of indemnity commission are advances of commission for future sales granted to intermediaries in order to assist with set up costs or business development.

General insurance products

General insurance products, such as motor, home, travel, health, retail or liability insurance, are typically subject to a single or standard commission model, based on the amount of premium charged for the insurance product.

Profit Share arrangements

In some cases, the intermediary may be a party to a profit-share arrangement with a product provider and will earn additional commission.  Any business arranged with these product providers on a client’s behalf will be placed with the product provider because that product provider is, at the time of placement, the most suitable to meet the client’s requirements, taking all the client’s relevant information, demands and needs into account.

Marketing Support

The firm may also be in receipt of marketing support from product providers.

Other Special Arrangements

From time to time, Sparrow Insurances Ltd may offer discounts to its clients. At present, we have arrangements with Zurich Insurance plc which allows us to offer a new business or renewal retention discount to clients. This discount is subsequently reimbursed by Zurich Insurance plc.

Clawback

Clawback is an obligation on the intermediary to repay unearned commission. Commission can be paid directly after a contract is concluded but is not deemed to be ‘earned’ until after a specified period of time. If the consumer cancels or withdraws from the financial product within the specified time, the intermediary must return commission to the product producer.

Other Fees, Administrative Costs/ non-monetary benefits

The firm may also be receipt of non-monetary benefits, such as:

• Attendance at, and participation in, conferences, seminars, and other training events on the benefits and features of products or services we provide to consumers
• Hospitality of a reasonable de minimis value, such as food and drink during a business meeting or a conference, seminar, or other training event.
• Reasonable travel and accommodation expenses where the  firm  participates  in  or  provides market research or training conducted by another firm.
• Assistance with Advertising/Branding
• Other minor benefits that are capable of enhancing the quality of the service provided to clients and do not impair the firm’s duty to act in the best interests of the client

Remuneration Arrangements

Outlined below is a list of the Product Providers that our firm deals with together with the commissions we receive. These are standard commissions and can vary on individual cases. They are also subject to change.