Editor's Comment: Quinn raises responsibility issue

When Ireland's Financial Regulator called in the administrators to run Quinn Insurance, few in the UK broking profession were surprised. The rumour mill had been in overdrive regarding the business since it pulled out of its Moody's rating in July 2008. Many were reticent to do business with the insurer and many lambasted it for pricing unrealistically.

Yet its core business in Ireland appeared strong and was therefore perhaps able to prop up ambitious growth in the UK. With the Financial Services Authority and Irish watchdog calling for the immediate suspension of business here, it appears that the business model may have over-stretched itself and thoughts must now turn to ensuring that clients are adequately covered. There will be many questions raised from this episode, for example: is the rationale of many brokers of "if it is good enough for the regulator then it is good enough for us" satisfactory?

Arguably, brokers should know more about their insurers than the FSA and many brokers' risk committees might well be questioning their judgement. Sean Quinn is now paying a heavy price for huge risks taken during the boom years; we hope that the reputation of the profession is not damaged by this episode.

IPT

This year's Budget was a non-event (see p.6), springing to life only when the Conservative party pledged to reverse the increase in National Insurance next year. One welcome piece of news was that most lines of business have been made exempt from the introduction on 9 December 2009 of Insurance Premium Tax for brokers' fees. Those charging charges for polices not underwritten individually or where the premium is fixed will be taxed.

Brokers will have to make a decision whether or not they want to pass this saving on to customers and will have to adjust their systems accordingly. We must, though, credit another strong pan-industry effort in helping the government to make these changes.