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Being FSA licensed means that we are able to discuss and advise you of the various options that you have regarding over redemption insurance. From 18th January 2005, it is illegal for unlicensed practitioners to advise clients on insurance products. Should you decide that this type of cover is what you require, OneFee will make the arrangements for you through one of our insurance brokers. You will be presented with the quotation directly from the broker. Clients should be aware that it is not legal to mark up insurance products.
What is the difference between over redemption insurance and fixed fee?
Fixed fee is essentially a commercial contract whereby the fixed fee company takes a view on all of the various services that they will be undertaking for the promotion and agrees to take full responsibility for the associated costs, for a one off payment made prior to the start of the activity. This means that the client has no further liabilities for the cost of fulfilling consumer applications whatever the final redemption figure.
With over redemption insurance, the client takes the responsibility for the cost of fulfilling the promotion, from the first until the last application. The client pays the insurer a premium, usually for a band of cover which is generally double the intervention threshold. For example, if the insurer agrees that a promotion will redeem at 10% and sets that as the intervention threshold, the client will have insurance cover from 10% to 20%. If the final redemption figure is over 10% but less than 20%, the client can make a claim against the insurer for the associated costs. The insurer may send in a loss adjuster to investigate the claim after which a settlement will be offered. The client is responsible for the redemption costs up to the 10% threshold and again for any redemption costs after 20%. This is known as the promotion “going through” the insurance. Clients are advised to carry the contingent liability on their balance sheet.
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