Divided we fall.

- Insurance Age staff
- 30 Sep 1998
- Indicative reading time: 2 minutes

If the Treasury thought that announcing the repeal of the Insurance Brokers Act 1977 and the aboliti...

If the Treasury thought that announcing the repeal of the Insurance
Brokers Act 1977 and the abolition of the Insurance Brokers Registration
Council would sort out regulatory divisions within the broking and
intermediary market, it could not have been more wrong.

The market now knows that the IBRA will go, but can only guess at when it
will actually happen. The Council is ceasing its operations as of 31
October, nobody knows whether anything will replace it and the Act will
still be in place after this date. And, to cap it all, we now have two
non-statutory bodies vying to replace the IBRC, accompanied by
unprecedented levels of bickering and bad-mouthing between the trade
bodies.

It is crucial that brokers remain level-headed over the next couple of
months. Despite claims from certain individuals that there will be mass
deregistrations from the IBRC, this has not yet happened. Speculation
about calls on the IBRC's indemnity & grants scheme have also been blown
out of all proportion.

The Treasury did not expect the Council to announce its dissolution so
quickly and is now having to reassess what to do in the short term. At the
time of going to press, the Treasury was due to meet with the council to
discuss the way forward. So, until the outcome of this is meeting is
known, the sensible thing to do is to sit tight.

However, nobody can really blame the market for acting somewhat
chaotically after the Treasury's announcement. Neither the Treasury nor
the Government really understands the broker market or its needs, and the
decision to scrap rather than enhance the IBRC will have upset many
people. Nevertheless, the decision was in line with what the Government
has been saying all along - it wants the market to come up with a single,
non-statutory body.

So it is regrettable, if not farcical, that the market has come up with
two.

Mr Paddick must be admired for fighting so passionately for the broker
cause. He perceived a problem and moved quickly to put proposals into
place to expand the IIB's remit to include a regulatory function.

However, one of the most telling comments about this was made by one of
the attendees at the IIB's EGM. Allan Brett, of Berns, Brett & Co, said to
Mr Paddick: "With your powers of persuasion you should have been able to
join with BIIBA and not have taken this separatist attitude. I believe the
road has come to an end. We should not go it alone, we are a small band of
people. Regulation is bigger than us, we will be picked off."

While NEWRO's proposals are by no means perfect - the fact that its
ultimate sanction is agency cancellation by insurers will rightly stick in
gullets of many brokers - it does have the support of all the major bodies
in the insurance market.

While the Treasury may have allowed for two bodies in the short term,
ultimately it wants one. If pressed, which one do you think it would
choose?

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