The British Insurance Brokers' Association (BIBA) and the Institute of Insurance Brokers (IIB) have jointly responded to the Financial Services Authority's (FSA) consultation ‘The Financial Conduct Authority (FCA): Approach to Regulation'.
The two bodies have jointly called for regulatory barriers to be lowered and for the current inappropriate style and intensity of regulation to be reformed.
In the response, concerns with regulation were outlined under three headings of proportionality, transparency and rules. The FCA was urged to take a fresh look at the rules to clarify and simplify the current Handbook, taking into account the needs and characteristics of insurance brokers.
Eric Galbraith, BIBA Chief Executive, said: "The creation of a new regulator gives us a unique opportunity for a fundamental review of the way general insurance brokers are supervised. We would like the new regulatory regime to be more approachable, more knowledgeable about the markets and more sensitive to practical aspects of compliance, for both small and large firms."
Research carried out by BIBA earlier this year was used in the response to highlight that the risks posed by general insurance brokers to the regulatory objectives are minimal, Steve White, BIBA's Head of Compliance and Training, said: "This makes a compelling case for a more focused approached on the risks we pose, rather than just increasing the burden of regulation. Going forward we want to see proportionate, cost effective and appropriate regulation."
Barbara Bradshaw, Chief Executive of the IIB, added: "It is important that the FCA has sufficient expertise, understanding, flexibility and resources to be able to respond to the differing demands of supervising the wholesale and retail insurance broking communities."
The response said that compliance is over-complicated and resource intensive and called for simplification of the existing rulebook. It also said that the level of fees and levies, which are the highest for insurance brokers in the EU, along with the cost of compliance threatens the viability of firms. In its conclusion, BIBA and the IIB called for the FCA to adopt more open and transparent procedures for budgeting and cost allocation.
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