
GRiD, a representative organisation for the group risk sector, has revised its statement of best practice for supplier agreements. The statement aims to give confidence and clarity to insurers and intermediaries when employers purchase group risk insurance such as employer sponsored life assurance, income protection and critical illness cover.
The new statement will therefore provide additional clarity to clients and help insurers communicate how group risk insurance operates in the UK, as well as explaining to clients how reassurance can be provided through financial services law and regulation.
Many employers are choosing to have additional supplier agreements such as non-disclosures and data-processing agreements as well as, or instead of an insurance policy. GRiD’s view is that these agreements are often inappropriate for group risk businesses, and a policy alone is a sufficient contract.
The statement of best practice has been formulated to explain:
- the approach recommended by GRiD in relation to supplier agreements, non-disclosure agreements, data processing agreements, and service level agreements
- how group insurance operates
- the safeguards in place for employer purchasers of this insurance cover
This document also explains that insurers are bound by internal government policies and practices which address issues such as bribery, conflicts of interest and modern slavery. The UK insurance sector is a highly regulated industry with significant levels of protection already embedded in its foundation. Therefore, employers can be assured that their insurer will comply with those industry standards.
Paul White, chair of GRiD 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.”