Biba chief also wants completion of the FSCS review by April 2012
Biba chief executive Eric Galbraith has called on HM Treasury and the new Financial Conduct Authority (FCA) to work together to deliver the right regulation for insurance brokers.
In his opening address at Biba 2011 Conference in Manchester, Galbraith called for “regulation that is appropriate and proportionate to the low risks that we pose”.
As part of his call, Galbraith recognised the political pressure for regulatory change but emphasised the importance of this not resulting in detriment to the appropriateness, proportionality and cost of any regime for insurance brokers.
Galbraith outlined that change was needed specifically relating to the unfairness of the current regime and that a more prescribed approach was required on areas like capital requirements and adequate resources.
Galbraith then turned to the need for change to the “totally flawed” structure of the Financial Services Compensation Scheme (FSCS) and demanded that the new rules be in place by April 2012, in time for the next financial year.
He outlined the need for a model that separates the professional insurance broker from other sellers of general insurance and removes the cross-subsidy, and he reminded members to sign the Biba petition on this issue by the 20 May deadline.
Galbraith also announced that Biba had begun a series of meetings with insurers to seek a market solution to the handling of premiums. He said that protection of client money was one area that Biba’s recent regulation research highlighted as a significant risk.
He told brokers: “We have detected an appetite among the insurers to help find a solution, where moneys can be held on a risk-transferred basis, outside of FSA rules, giving insurers, the regulator and customers comfort about the protection of money.
“I would urge you all to get behind this move and support us in our efforts to try to achieve a secure and simpler solution to client money.”
Biba’s conference and exhibition is being held in Manchester Central on 11 and 12 May and is free to all Biba members.
