AIIB backs GISC until 2004

The Association of Insurance Intermediaries and Brokers (AIIB) has confirmed its interim support for the General Insurance Standards Council (GISC).

This follows last week's announcement by the Treasury that the Financial Services Authority (FSA) will take over regulation of general insurance by 2004.

AIIB chairman Mike Slack said: "We are disappointed at the Treasury's decision, however, we will continue our support of GISC during the transition period to FSA regulation.

"The AIIB remains committed to fair and practical regulation that benefits consumers and is fair to our members and will continue to develop facilities and aids to assist members to comply with the requirements of the new regime."

The AIIB said it had issued an advisory statement to members encouraging them to remain within the GISC self-regulatory regime.

This follows the Treasury's statement that the FSA will give credit to brokers and intermediaries who are already regulated by the GISC in order to aid the smooth transition from one regulator to the other.

However, the AIIB said it was concerned that the draft EU Directive on Insurance Intermediaries, which led to the Treasury's decision to impose statutory regulation, currently only applied to organisations whose core business was insurance.

Thus, it said, travel agents, banks and others selling insurance as their secondary business, would be exempt from FSA regulation.

Slack added: "The opportunity to create the longed-for `level playing field' for all those selling general insurance has been missed.

"The industry has been unable to prove to the satisfaction of Government the ability to self-regulate and one can but speculate on the damaging influence caused by the industry¹s failure to present a common front.

"It is a major disappointment for all those who have worked hard to bring the industry together under GISC."