Chaotic EU to raise profile - Spitzer-style

Rumblings in the EU Competition Directorate turned to stark reality last month when it launched its own Spitzer-style investigation into what it calls business insurance.

At a political level, Europe is in chaos - with constitutional plans in tatters and in a state of deadlock over the budget. All across Europe, people are starting to question assumptions about the EU's purpose, its role and its modus operandi. There is a 'hearts and minds' battle being waged by the politicians that will leave the bureaucrats with plenty of scope for pursuing their own agendas while their political masters are distracted.

There are 25 commissioners, which is too many. Even the now-marooned constitution acknowledges there were too many. Now, they have a chance to prove that they and their armies of officials are needed, which forms the context of the Competition Commission's enquiry.

Sitting in a broker's office in a provincial town somewhere in the UK, you might think this has little to do with you. This was the initial reaction of Marsh, AIG and others when the New York State Attorney General declared he wanted to look into the relationships between brokers and insurers. Just look at the folly of that approach.

The EU investigation needs to be taken very seriously from the outset. There are areas of the market that do not always work very well as the crisis in employers' liability insurance has reminded us. Also, not everyone admires the UK's free-market approach, preferring a cosy world of agents, often part-time. The French, in particular, will fight very hard to defend this approach as it is part of the fabric of their heavily subsidised agricultural sector.

Do not expect everyone in the UK to rush to sing the broking sector's praises either. The Association of Risk and Insurance Managers has recently released a second survey of its members' views of the broking sector and the perceived lack of transparency. It shows that major commercial clients are far from happy with their brokers and Airmic is going to repeat its research every six months until its members are satisfied with brokers' conduct. But it has imposed a time limit of 18 months before it demands tougher regulation of the buying process. That will make interesting reading in Brussels.