The British Insurance Brokers' Association (Biba) has staved off the threat of mandatory commission ...
The British Insurance Brokers' Association (Biba) has staved off the threat of mandatory commission disclosure after securing an agreement with the Financial Services Authority (FSA) to work towards a market solution.
The decision comes after what head of compliance and training at Biba, Steve White, described as a "torturous" three-year process.
"The final touches are being made to the solution with the aim of achieving Industry Guidance status," said Mr White. "The FSA is giving our sector a final chance to show that their concerns can be addressed without the need for mandatory disclosure."
Edward Harley, head of retail policy and financial promotions, said the main concern was that buyers of commercial insurance were poorly informed about brokers' remuneration, services and capacity.
"We are absolutely satisfied with the outcome of this, but we need to make sure the market is implementing the changes we want to see. We are confident this will work but we need to ensure trade associations endeavour to work it out," said Mr Harley.
Although stressing that much of the work towards a solution had been done during the course of discussions with the regulator, Mr White warned that the hard work was just about to begin.
"We know what the market solution will look like but we just need to figure out how to word it. We are all on a bit of a learning curve," he said.
"It is important to stress that these are guidelines for brokers, not a new set of rules and the mandate could still come. This is the last chance saloon but at least we now have the ball.
"The watershed was contract certainty - if we hadn't achieved that, there is no way the FSA would have allowed this. The hard work starts now," he warned.
"It has been an interesting and fruitful process. It was a question of commitment from the trade bodies to deliver the outcomes we desire but we have been encouraged by the commitment they have shown.
"My experience of dealing with the associations was that they were open to the principle of what we wanted to do and we came to a degree of consensus," he added.
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