Biba makes last ditch bid to avert regulatory burden
Brokers face being regulated under the new claims regulatory regime, the claims watchdog has said.
In an exclusive interview to be published in Insurance Times next week, Mark Boleat, head of claims management regulation for the Department for Constitutional Affairs (DCA), said brokers that captured third party claims would face regulation when it was introduced next year.
He said: "In dealing with their own policyholders brokers will be exempt. If they are selling cases they will not."
Any such move would add to the regulatory burden on brokers, who must also comply with the FSA's regime. It could also force some to close down their revenue stream from the sale of claims.
Discussions are underway over whether an appointed representative system, similar to that established by the FSA, could be used to restrict the regulatory demands on companies. "The basic intention is not to replicate regulation," Boleat said.
Biba is to make a last ditch attempt to stop brokers which procure claims being regulated by the new rules. It will write to the DCA - as the ABI did last month (News, 28 September) - urging it not to increase the regulatory burden on brokers that buy and sell claims.
"We will be responding to the DCA and pointing out that the Secretary of State has the power to exempt [companies from regulation] where there are adequate controls in place," said Steve White, Biba's regulation and compliance manager.
"If you are dealing with customers and pursuing uninsured losses, then you will be operating under FSA rules."
Broker sources said: "There is a lot of claims procurement already going on, but Biba would be concerned if its members were subjected to further rules unnecessarily."
Last month, Insurance Times reported that insurers involved in third party capture could also face regulation under the claims regime (News, 14 September).
Boleat said the DCA was in the throes of approving the "final 10%" of the regulations to be announced at the end of this month.
' In next week's Insurance Times Baroness Ashton, the DCA minister who sponsored the Compensation Act, will give her views on how regulation will impact the insurance industry