10 BROKERS’ MONTHLY
BIBA CONFERENCE 2009
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BIBA CONFERENCE 2009
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FSA takes it on the chin
It was “knock the FSA” time again at the BIBA conference in
Manchester. But the Authority’s Jeremy Hills kept his cool and
underlined its willingness to listen to brokers’ thoughts on the
shape of future regulation. Our long-service BIBA conference-goer
Brian Susman was there and has this report and comment
he Financial Services He went on to suggest that the
T
Authority came in for its FSA might see the irony of trying to
almost perennial chastisement micro-manage the insurance broker
at the BIBA national conference, held sector, even while the rest of the
by Brian Susman
in Manchester on May 13 to 15. financial world was collapsing around
There were some further warning them.
sounds from BIBA about the dangers Perhaps one good thing to come
unlike that of any other EU country.
of over-regulation of the broking out of the financial and economic
When the European policy writers
sector, a theme which continued into maelstrom, said Mr Thornton, would
drafted the IMD (Insurance
the discussion forum – although here be a more sensible and appropriate
Mediation Directive), I am certain
the FSA Small Firms head, Jeremy re-allocation of the FSA’s resources
they did not, in their wildest dreams,
Hills, stood his ground well in re- and priorities. Insurance had been a
envisage the regime that it spawned
affirming the regulator’s intention to rock of stability during recent
here in the UK.”
continue dialogue with the industry’s troubles. This must not be
His message to the FSA was that
representatives to ensure that an overlooked in any move towards
they should not lose sight of brokers’
acceptable level of regulation was more proscriptive legislation aimed at
low risk category in building
maintained. the banks.
intensive supervision and a credible
BIBA chairman Derek Thornton
deterrent. Regulators needed the
fired the opening salvo in the FSA’s Regulation Costs Warning
right supervisory tools to do their job
direction during his remarks at the The chief executive of BIBA,
properly, “…. but in doing so the FSA
very start of the conference. The Eric Galbraith, took up the Financial
must not make strong, effective
most pressing area needing attention, Services Authority theme in the
regulation so costly that it forces
he said, was reform of the financial course of his opening remarks at the
good firms out of the sector, as that
services compensation scheme’s conference. He pointed out that the
cross-subsidisation funding model. Authority had now had four-and-a-
Nobody else in Europe had a system half years to gain full understanding
like the UK’s. of brokers’ workings.
“We understand that the “But still the question lingers.
structure which makes brokers liable We know insurance brokers pose little
for banks’ losses was purely the FSA’s risk to consumers or the economy;
idea and decision,” he said. “We the FSA knows brokers pose little risk
believe that this system of cross- to consumers or the economy; so why
subsidisation is grossly unfair and our does the regulator insist on imposing
top regulatory priority for 2009 will such heavy burdens on us?”
be to continue to lobby for change.” He continued: “At BIBA we are
increasingly concerned about the
disproportionately bureaucratic
approach the FSA is taking towards
regulating our sector and the
significant increase in the regulatory
cost burden it is imposing on a large
number of our firms.
“The style and cost of insurance
intermediary regulation in the UK is
Eric Galbraith
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