"We hope the Statement will support insurers, intermediaries and their clients in making the group risk procurement process more efficient for everyone involved."
- Paul White, chair of GRiD
These revisions respond to an increasing number of employers proposing additional supplier agreements, non-disclosure agreements, data-processing agreements and service-level agreements, in addition to, or instead of the insurance policy itself. Group Risk Development (GRiD) believes that these agreements are not usually appropriate for group risk business and that the policy document itself is a sufficient contract.
GRiD’s new Statement of Best Practice offers guidance and is positioned to help insurers and intermediaries communicate how group risk operates in the UK and how reassurance is provided through financial services law and regulation. The new Statement has been formulated to explain the approach recommended by GRiD in relation to supplier agreement, non-disclosure agreements, data processing agreements, and service level agreements; how group insurance operate; and the safeguards in place for employer purchases of this insurance cover.
Likewise, the new Statement explains that the internal governance policies and practices of insurers are designed to cover typical employer concerns, particularly bribery, conflicts of interest, modern slavery, IT security, and confidentiality.
Commenting on these revisions, Paul White, chair of GRiD, has said:
“It is quite reasonable that any company purchasing a product or service wants to protect itself, and ensure that the organisation they are purchasing from acts in a responsible manner should an issue arise. However, it’s important to realise that the group risk insurance industry is already highly regulated, and employers, therefore, do not need to add in an additional layer of contractual obligations.
“We believe that additional supplier agreements, which are often better suited for other products and services, are not necessary when purchasing group risk insurance because a policy document itself gives all the reassurance and protection required.
“Any other agreements could make it difficult for the insurer to carry out its normal activities in connection with the insurance and conflict with the insurer’s regulatory and legal responsibilities.”