No evidence that commercial customers want change, says chief executive Galbraith.
The British Insurance Brokers’ Association (BIBA) has today formally responded to the FSA's Discussion Paper DP08/2 Transparency, disclosure and conflicts of interest in the commercial insurance market.
Eric Galbraith, BIBA chief executive, said: “Our position on these issues is well known to the regulator. We believe that the current combination of high level principles plus a rule requiring disclosure on request is sufficient. There is no evidence that the current regime affords commercial customers inadequate protection or that these commercial customers want change.”
Galbraith continued: “BIBA however recognises the FSA’s desire for greater transparency and has committed significant time and resource into providing guidance to members on identifying and managing conflicts, increasing transparency and on disclosure processes. We strongly support building on the current rules to achieve an industry solution.”
BIBA has been gauging the support of its members for an industry solution which responds to the concerns raised by the FSA yet respects the spirit of more principle-based regulation.
Steve White, BIBA head of compliance, said: “Our members tell us that they would prefer to develop a market solution in preference to regulatory intervention – this approach was successful in respect of contract certainty and members believe it can work for these issues.”
White continued: “A solution that provides for greater transparency for the commercial customer in respect of the intermediary’s status, the services provided and how those services are paid for, whilst disclosing the details of the remuneration upon the request of the commercial customer is one which has widespread support. We are still to finalise the details but are pleased with the level of support we are receiving.”
