Acting on Behalf

It is the settled fate of the insurance broker to pass his whole working life acting on behalf of other people. I look through all the insurance polcies avalable to me on behalf of the customer. I create policies on behalf of the insurer who actually carries the risk. I arrange monthly payment on behalf of customers too sensible to surrender a year’s premium in a single lump. I am, in the fullest sense, a man of behalves: a creature of agency, a professional middle, a sort of human preposition. So when I confess that to do my own job I was lately required to act on behalf of yet another party, a lender this time, you may reasonably feel I am describing nothing more remarkable than a Tuesday.

This behalf, though, was a stranger beast than the others, and it began with a request so humdrum I blush to admit it caught me off guard. I wanted credit scores, the private bureau data that, as everyone in the trade will tell you over the second drink, sorts the prudent customer from the one who treats a roundabout as a matter of personal interpretation. I assumed I would buy them. One pays the bureau; the bureau, in the manner of bureaux the world over, charges a fortune and returns a score. Having approached, figurative cash in hand and braced myself for that score, the answer that came back rather floored me: I could not simply purchase the data. I would first require the blessing of the premium-finance lender, the single firm to which I dispatch every customer who would sooner pay by the month, so that I might fetch the scores on their behalf.

Consider the geometry of this. The lender does not employ me; if anything I employ the lender, in that I am the reason it has any customers to lend to at all. And yet on the matter of the bureau data it stood between me and my spreadsheet like a maître d’ guarding a table I had laid myself. The explanation, when I prised it loose, was a small masterpiece of the form we have agreed to call self-regulation.

The pooled credit records that the bureaux keep are governed by a 1990s compact named the Principles of Reciprocity, founded on the stern and not wholly unreasonable notion that one may draw from the common well only for the purposes for which others have filled it. Insurance, the compact rules, is not credit and may not be tipped into the well at all. The right to lower a bucket is earned solely on account of lending: the modest loan by which a customer is allowed to settle his premium in twelve pieces rather than one. The credit decision unlocks the data; the pricing decision does not. And the lending, in my arrangement, was the lender’s and emphatically not mine. So the key hung on the lender’s belt, and I might reach the well only by borrowing the lender’s coat and answering, if anyone stopped me, to the lender’s name.

Let me be plain about what the data then does, since plainness costs me nothing and nobody in my business pretends otherwise: the number prices you. Of course it prices you. I had no burning wish to help the lender work out whether your direct debit would bounce; the lender is quite capable of fretting about that without my assistance. I wanted the number to set your premium, and I have yet to meet the broker or insurer who says anything different. We are not bashful about the use. We will tell you to your face, and we tell you in our literature.

Which is what makes the next item so very moreish. That same published literature (the brochures, the notices, the consumer FAQs got up in their soothing blue) announce that the use of this data in underwriting and pricing is prohibited. Not restricted. Not conditional. Prohibited, in the flat voice of a man forbidding the dog the sofa. We have, in short, a trade that performs a thing openly, advertises the thing, and in the very next clause declares the thing forbidden, all without a single eyebrow in the building consenting to rise.

So one asks the only question any prohibition is owed: forbidden by whom? Not by Parliament, which has passed no such law. Not by the Financial Conduct Authority, which scrutinises what insurers do with their rating factors yet keeps no Index of the forbidden ones and has never troubled to enter credit upon a list it does not possess. Not by the Information Commissioner, whose own office helped compose the very privacy notice in which the bureaux confirm, with every appearance of good cheer, that the data may indeed decide the size of your premium. The dread tribunal turns out to be the compact itself, administered by a thing called the Steering Committee on Reciprocity, which has openly admitted to holding no powers of its own and which its own regulator examined and declared not fit for purpose — the verdict one reserves for a chocolate teapot.

Let me be fair, for the compact is no fool’s document. A shared reservoir of sensitive data does require rules about who may dip a cup, lest it be drained dry by the first passing chancer with a database licence; the lenders who assembled the records have a decent claim to govern who reads them; and the maxim that one contributes before one helps oneself is more creditable than most of what is done with money in this country. The lender whose coat I borrowed conducted itself with perfect propriety; it held a genuine entitlement and lent it to me exactly as the apparatus intends. The folly here is architectural, not human.

So what is the prohibition actually for? On the available evidence, for nothing; or, more precisely, for itself. It forbids a practice conducted in plain sight; it is honoured by a ceremony that changes not one decimal place; it is enforced by a committee constitutionally unable to enforce; and when the rite is concluded the number lands on your premium exactly as it would have landed had nobody troubled to perform any of it. It is a turnstile bolted to the middle of an open field. It is a maze whose hedges are painted on the floor. It is the most ornate piece of nothing I have met in a profession not otherwise wanting for contenders, and I was obliged to dress up before I might walk through it.

And so the afternoon passed. A man who carries no risk priced cover he does not insure, by means of a number he meant all along for himself, whilst wearing the coat and answering to the name of a lender whose sole contribution to the proceedings was to hold a permission I lacked. I have, as I say, given a career to acting on behalf of others. It had simply never struck me that the day would come when I must act on behalf of someone else in order to do something, at last, gloriously and entirely for myself.