The British Insurance Brokers Association welcomed the publication of the Treasury Committee’s report on the Financial Conduct Authority today.
Eric Galbraith, BIBA chief Executive, said, “The Treasury Committee should be applauded for the breadth of this report. The formation of the FCA is a real opportunity to get the right regulation in place,”
The report offered a number of recommendations for the government’s consideration ahead of the drafting and publication of the Financial Services Bill this year.
Among the recommendations was the promotion of competition in the regulatory framework. The treasury said that the Government should legislate to give the FCA a primary objective to promote effective competition for the benefit of the consumer.
Galbraith continued: “As the leading trade association representing the interests of professional insurance intermediaries, we have been actively engaged with Ministers, politicians, civil servants and the regulator to discuss a more appropriate, proportionate and cost-effective approach to the regulation and supervision of our low risk yet vital sector.
“Independent research we presented to these parties as part of the development of the new regulatory architecture demonstrated that despite insurance brokers making a direct and indirect contribution of 1% to UK GDP, we have faced an increasingly over-burdensome approach from a regulator designed for much more riskier markets than ours.”
Steve White, BIBA Head of Compliance and Training, added, “We welcome the report’s comments on costs. Our members have faced an ever increasing regulatory cost burden since 2005. Indeed, the independent research highlighted that this burden is some three times higher for UK insurance intermediaries than for the second dearest state in the EU (Ireland). We have repeatedly stated that this position is simply unacceptable.”
White added, “The competitive position of the UK’s insurance intermediary sector is significantly threatened by the nature and costs of the current regime and it is very important in the development of the FCA that this issue is not overlooked.”
