One of the UK’s first deposit replacement scheme is currently unable to take on new business.
Deposit replacement insurance scheme Dlighted has temporarily lost its regulatory registrations as it seeks a new provider for its protection product.
Dlighted, set up by letting agent Ajay Jagota, offers an insurance product paid for by landlords instead of tenants paying a deposit.
Previously, Dlighted was registered by the Financial Conduct Authority (FCA) as an appointed representative of insurance broker Alan Boswell Insurance Brokers Ltd since December 2016.
This gave it regulatory permissions to offer or sell insurance products or services through Alan Boswell Insurance Brokers and landlords taking the policy would receive a protection scheme provided by Great Lakes.
But the FCA register shows that as of January 26, Dlighted is no longer registered as an appointed representative.
A spokesman for Dlighted said the firm was in the process of becoming directly authorised with a bigger insurance provider to cope with larger capacity so is currently unable to take on new business.
He said: “With a couple of big deals about to be signed off it was something that couldn’t wait any longer.
“For a short transitional period we can’t renew or issue new policies but all existing ones are still valid and retained by Alan Boswell Group, so no-one is without cover.”
The provider could not be named for commercial reasons.
However, a note from Jagota sent to Dlighted customers suggested the Alan Boswell Group had removed the permissions.
Jagota said: “Dlighted is in the process of switching to a new insurance provider. All existing policies remain on-cover, however as Alan Boswell Group has removed our appointed representative status we are currently unable to issue new or renew existing policies.
“Please contact Alan Boswell Group as they have retained access to the existing product if you have any questions related to renewals or new policies.
“This is an enormously frustrating situation for us and while we have tried to resolve the matter we have been unable to with the current provider, but we are in talks with other providers.
“In the meantime, we are grateful for your patience throughout this transitional period.”
Jagota says around 1,000 agencies use the Dlighted scheme including his own KIS Lettings.
Dlighted offers landlords or an agency an insurance policy that covers property damage and provides a rent guarantee and legal protection, instead of a tenant paying a deposit.
Landlords or agents pay a fee, set depending on how much rent is charged, to provide six or 12 months of cover.
The policy provides £500,000 of cover against property damage, a £75,000 rent guarantee and £50,000 of legal protection.