Biba backs Tories "cautious" approach to FSA reform

The British Insurance Brokers' Association has welcomed the Conservative Party's promise to use caution in dismantling the Financial Services Authority if it gains control at the next general election.

Biba chief executive Eric Galbraith, who was responding to assurances given by Shadow Cancellor of the Exchequer George Osborne in the Financial Times newspaper last week, said: “Following publication of the Conservative White Paper From Crisis to Confidence: Plan For Sound Banking, we responded setting out our high level concerns for the insurance intermediary industry. We were concerned about possible disruption and take some comfort from this explanation.

He continued: “Our major criticism of the current regulatory regime is that the insurance intermediary sector was shoe-horned into an existing regulatory framework designed for the higher-risk parts of the financial services sector. We are concerned that the Conservatives might simply impose their proposed banking regime upon us.”

Steve White, Biba’s head of compliance and training, said: “The insurance intermediary sector is vital; it provides professional advice to businesses and individuals; and plays a key role in the identification, measurement, management, control and transfer of risk. Insurance brokers and intermediaries distribute nearly two-thirds of all UK general insurance and in 2007, UK insurance brokers and intermediaries generated £1.5bn of invisible earnings”.

White added: “It is essential that any new regulatory regime is appropriate, proportionate and cost efficient. It is also important that UK insurance intermediaries are not competitively disadvantaged compared to their European peers and Biba will emphasise this point in its ongoing dialogue with the Shadow Treasury team.”