In its formal response to HM Treasury's consultation paper ‘A new approach to regulation: building a stronger system’, BIBA welcomed the open approach taken by Government to the consultation process and reiterated its support for a single regulatory body for the insurance intermediary sector.
Eric Galbraith, BIBA chief executive said: "Whilst we support the principle of proportionate, appropriate and cost-effective regulation, we do have some serious concerns regarding the proposed supervisory approach as set out in chapter 4 of the paper, which looks very similar to what we have now."
Galbraith added: "Our recently published research highlights the limited risks that insurance brokers pose and we are actively calling on the Government and regulator to ensure that the approach being developed for insurance brokers is more appropriate than it has been in the recent past."
Steve White, BIBA head of compliance & training, said: "The direct and indirect cost of regulation for UK insurance brokers is way out of line with the rest of Europe. That cannot be right and it is not acceptable. We understand and accept that the banking crisis has increased pressure on regulators and supervisors around the world and that there is now political interest in the effectiveness of rules and supervision.
“However, it is vitally important that our new regulatory regime is better at aligning supervisory scrutiny with risk, otherwise the danger is that a ‘one size fits all' approach will be adopted, resulting in inappropriate cross-sectoral approaches. This would inevitably be to the detriment of the low risk insurance broking sector, and that would not be acceptable for UK businesses."
