Eric Galbraith has a lot on his mind
I have not seen much, if anything, in the press regarding recent developments in Ireland and New York, moves which could have costly implications for the insurance intermediary community if they go the full course.
Ireland’s Financial Regulator has just published the findings of its review of the mortgage and insurance intermediary market and how it interacts with consumers looking at the kind of issues that our FSA’s review of transparency, conflicts and status disclosure covered, albeit that was in the commercial market.
Across the Atlantic, the New York State Insurance Department has proposed to change the current market to mandatory disclosure by publishing for consultation what they refer to as draft producer compensation transparency regulation. The scope of this legislation may stretch just to the state of New York but given the influence of that particular market, other state regulators elsewhere in the US will no doubt be monitoring developments.
And talking about costly moves, BIBA has been moving office during the last few days. Moving office is no fun and it’s expensive, but we have sought to keep costs and disruption to a minimum for our membership. A new office takes to time adapt to and no amount of forward planning can cover everything. Our removers don’t seem to be able to get one large item of furniture out of our old office building (no it wasn’t my desk) and this is now wedged firmly on the stairs between floors causing much scratching of heads. Certain familiar items still have to emerge from crates. However, I’m pleased to say we have held our first meeting with outside partners in our new conference facilities and all the telephones and computer systems were up and running when they were supposed to be.
Developments in Ireland and New York provide two different approaches to the same issues. They also serve to highlight how jurisdictions around the world are at different stages in the journey towards improved disclosure on intermediary remuneration.
BIBA will be keeping a close eye on what is happening in both jurisdictions and will be providing input about our own experiences on these issues to both the Irish and US regulators.
In the meantime, back home the insurance industry solution relating to commission disclosure in the commercial market, which BIBA has been leading, has now entered the formal FSA process that it has to undergo in order to be confirmed as Industry Guidance.
We hope to see the solution successfully complete that process during the next few weeks.
Given the moves to review the Insurance Mediation Directive in Brussels and the wider changes and discussions throughout the world the intermediary sector needs to ensure clarity about transparency, conflicts and status. If we don’t we could see enforced changes in our law and regulations - a move which could, absurdly, result in only advice being regulated.
Still on the subject of expensive moves, brokers will have had time to digest the FSA’s consultation paper (CP09/7) on regulatory fees and levies for 2009/10, although I suspect that their blood pressure may not yet have returned to normal if their reaction to this document is anything like mine. The increases proposed in that consultation paper are truly staggering (between 30 and 70% for general insurance intermediaries and they got off comparatively lightly!) and could not come at a worse time for the financial services industry. You can rest assured that BIBA will not be keeping quiet on the matter.
Well that’s it, I’m off. I have had my fill of expensive moves for the time being.