Trade bodies urged to stick to same path

Reported in Insurance Age; 5th November 2009

Brokers have called for their trade bodies to represent them with a united front in the wake of the Tory’s proposals to scrap the Financial Services Authority (FSA).

The Conservative White Paper, From Crisis to Confidence: Plan for Sound Banking, has raised concerns with brokers over plans to raise costs, fragment regulation and pass responsibility for regulation over to the Bank of England.

The British Insurance Brokers‘ Association (Biba) and the Institute of Insurance Brokers (IIB) have been vocal in response to the Government on the subject of future regulation. Biba has regularly lobbied the HM Treasury and the FSA and planned to meet this month with the shadow financial secretary for the Treasury, Mark Hoban.

While the IIB said it shared Biba’s anxiety, it has chosen to respond separately to both the HM Treasury and the FSA. The IIB said it planned to lobby the Conservatives through its parliamentary adviser, John Greenway MP, who also chairs the All Party Group on Insurance and Financial Services.

However, this two-pronged approach has caused concern in the broking community.

Emma Knight, compliance manager at MCE, said: "Two bodies, from a regulatory and representative point of view, will definitely lead to fragmentation and communication needs to be top notch or everything will fall apart. We will not feel comforted or protected by either body as one will say one thing while the other is saying something else. I think there could be quite a lot of conflict there."

Tim Ryan, managing director of Ryan Insurance Group,echoed those sentiments: "We must, as an industry, make sure that we offer a cohesive opinion on regulationand are well represented at the highest level. We must not appear as a disparate group of businesses otherwise we will lose control of our own destiny."

In response, Barbara Bradshaw, chief executive of the IIB said: "I’d say, financially, we need to work together to make regulation more cost-effective for brokers. We all come from the same side and we now have an opportunity to make regulation more relevant to what brokers do on a day-to-day basis."

Eric Galbraith, Biba CEO, saidthat in recent years Biba had strengthened its lobbying position considerably, explaining: "Having one voice in the sector would add extra strength to this, but this is not the case and therefore we maintain a regular dialogue with various organisations, including the IIB, to inform them of our activities and issues relevant to them."

In April this year, the broker bodies joined forces with the Association of British Insurers and the London International Insurance Brokers‘ Association on the subject of commission disclosure to convince the FSA they could provide an industry solution.

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