Brokers confused by trade body launch

The British Insurance Brokers’ Association (Biba) and the Chartered Insurance Institute (CII) are names and acronyms with which every UK broker is familiar.

Since the start of the new year there has been a new set for brokers to add to the collection: the Insurance Brokers’ Standards Council (IBSC).

The group is chaired by Paul Anscombe, managing director at James Hallam, and its steering committee is made up entirely of insurance brokers. The council will focus on improving standards in the industry, “always driven by Financial Conduct Authority (FCA) principles and the legal environment”.

Living by the code

Anscombe told Insurance Age that the brokers had formed the council because “if we are a true profession then the code of conduct of the practitioners should be determined by the practitioners themselves”.

“They are the best judges of what good and bad practice looks like,” stated Anscombe, who added that there were several other reasons for forming the IBSC (see box).

But what of those other groups that already purport to be custodians for the industry?

Graeme Trudgill, executive director at Biba, welcomed a group of brokers attempting to raise standards, adding that the trade body had met with the IBSC and would do so again.

“We will talk to them about their plans when they have things they want to talk to us about,” he confirmed.

And herein lies one problem with this new group. As David Ross, communications manager at the CII, put it: “What are their objectives? I’m not sure that’s particularly clear.”

Although he claimed the CII would be “more than happy to hear what they have to say”, Ross said the IBSC was “still in its infancy trying to decide what its role is going forward”. Indeed, the aforementioned code of conduct is still in draft mode, due to be reviewed by the IBSC board in March.

One broker who did not want to be named said that, although the idea behind the organisation had merit, they were unimpressed by a lack of clarity around its aims.

And the same broker queried: “We’ve got Biba and the CII, do we really need another one?”

Both have various dedicated panels and committees aimed at dealing with issues in the broker market. The CII is the main source of exams for intermediaries, and hosts a disciplinary committee with powers to sanction members against whom complaints are made.

And of course the FCA has gained a lot of press in recent months for exercising, with increasing vigour, its ability to punish firms found to be sub-standard.

This is a power the IBSC will not hold. Anscombe conceded that the organisation would be unable to take any further action than ceasing someone’s membership, or denying them one, should they fail to live up to the code of conduct. “What we can’t do is get involved in very heavy legal scenarios,” he added.

Finding its place

So the IBSC seems to fall somewhere between Biba, the CII and the FCA. Like Biba, it will have no real power to sanction brokers but it will focus on individuals as opposed to firms. For this reason, according to the unnamed broker: “It is fundamentally flawed.”

If there is a conflict between a firm’s policies and the IBSC’s constitution or code, what incentive is there for an individual member to favour the council’s word over their manager’s?

However, Anscombe is confident that there is a place for the IBSC in the market, and claimed that, although the organisation will not be accepting members until the end of March, “numerous application forms are coming in on a daily basis”.

“Our members are individual practising brokers accountable at an individual level,” he said.

“It isn’t just [IBSC committee members] that are frustrated by some of the practices we see out there, it reflects badly on the whole of the market.

“And we think the message about improved standards is stronger coming from individual practitioners.”