A backlash from the premium funding sector has caused IBNA CEO Paul Serong to retract a comment that could have suggested premium funders are “robbing IBNA of income”.

Following the announcement of a joint venture between IBNA and premium funder Alliance Finance, other premium funders began competing harder to retain IBNA members’ business. In an internal notice to its members, IBNA said it was being “robbed” of its 0.5% commission on each transaction.

The comments raised the hackles of premium funders who are already upset about the IBNA-Alliance deal. This caused Mr Serong to send members a notice stating IBNA did not mean to suggest that premium funders were behaving improperly. “We wish to clarify that we are not suggesting that the premium funders are acting dishonestly or illegally in merely offering you, the members of IBNA, the 0.5% overriding commission that IBNA has received in the past,” the notice said.

Premium funders are critical of the situation. Pacific Premium Funding MD Grant Burley described the comments as “unfortunate”. “To suggest that funders were ‘robbing IBNA’ was misleading,” he said. “I know my competitors in the premium funding market have been equally enraged by this statement.” 

But while he’s sorry about the accidental lapse, Mr Serong isn’t backing away from the point that if members accept offers from other premium funders it will hurt the IBNA-Alliance deal. “Our point remains that if IBNA members accept the premium funders offer, the uptake of the Alliance joint venture will be reduced which will impact on the returns generated for IBNA,” Mr Serong said. 

“As part of the new joint venture agreement IBNA has negotiated 1.7 million share options in four tranches at escalating exercise prices. Based on expected growth of the share price it is anticipated that a considerable gain will be generated.”