BIBA has recommended that brokers and intermediaries stay registered with the GISC despite the news that the FSA would be regulating the selling of general insurance.
The British Insurance Brokers' Association (BIBA) has recommended that brokers and intermediaries stay registered with the General Insurance Standards Council (GISC) despite the news that the FSA would be regulating the selling of general insurance products.
BIBA said brokers would need to show they were in good regulatory shape before the FSA took over the regulation of general insurance, which is expected by 2004.
The Association also pledged to play a leading role in the new regulatory process. It said it would do all it could to ensure that the new regime included all sellers of insurance, such as direct writers, travel agents and the sellers of extended warranty insurances.
It added that it would try to prevent unnecessary and extensive costs being unloaded onto brokers.
BIBA said there were four main reasons for its recommendation.
Firstly, the Treasury has promised to give credit to brokers and intermediaries who are already members of GISC.
Secondly, brokers and intermediaries will need to be in good compliance shape for the FSA regime, which will almost certainly be more onerous than GISC. If a firm can demonstrate good compliance practice, then a smoother transition will be more likely. It is also proof of having a solid regulatory track record.
Thirdly, all members who continue with GISC, and brokers who sign up now, will get practical support and help from BIBA with FSA compliance via training, manuals, seminars and the ongoing developments of compliance systems. Once BIBA has more detail from the FSA, it will be able to extend the scope of compliance help.
Fourthly, consumers already recognise the GISC logo as a quality mark and standard; it is therefore important that brokers retain that confidence in the market.
BIBA added the GISC rules remained in place, as did the compliance requirements.
