A Spring general election could blow apart plans to repeal the Insurance Brokers Registration Act forcing the professional brokers' body to soldier on after its April 30, 2001 expiry date.
Insurance Brokers Registration Council (IBRC) chairman Alan Gavaghan said: “The possibility of an early election would cause the IBRC considerable problems. The government has to ensure the parliamentary order to repeal the act is put in place before an election is called, or else it will fall.”
The news comes as the IBRC this week announced it does not intend to collect renewal fees from individual members and partners, which are due on January 1, 2001. An order to effect the move has been placed before Parliament.
Gavaghan said: “It would have been quite a headache administratively and cost-wise to collect five-12ths of the retention fee from individual broker members.”
Corporate members paid their annual fees in May and will not be called on to pay further fees before the IBRC's demise.
Gavaghan said the IBRC has sufficient funds to continue operating until next April, but after this it could hit a cash-flow problem.
He added that the IBRC continues to receive membership applications from brokers and that its renewal rate stands at 80%.
IBRC supporter Andrew Paddick will today issue a blow to the fledgling regulator, the General Insruance Standards Council (GISC), by publishing survey results showing that most brokers prefer a regulator independent of insurers.
Paddick will reveal the results of the Institute of Insurance Brokers' (IIB) survey of all IBRC-registered brokers at a reception in the House of Commons. The survey gave brokers the choice of the IIB's proposed broker-only regulator or the industry-wide GISC.
“We have not had such a large response on any major issue since we started the IIB. It's been an overwhelming response,” Paddick said. He was equally jubilant about the result. “It's gone beyond my own personal expectations.”
And the GISC has admitted it will not hit its target of 1,000 members by the end of the year. Membership stands at around 670 and Catherine Nicholl of the GISC said: “I'm not sure we are going to hit the target.”
The GISC would be happier having fewer than 1,000 members if they were spread across the industry, Nicholl said. But she admitted: “If you look at the membership at the moment, banks and building societies look quite thin.” She said this was due to the time it took for the big high street multiples to decide whether to join.
Nicholl said the GISC had signed up about 80% of the market in terms of insurers and she insisted that “membership will take a quantum leap, but not until the New Year”.
Nicholl said there were a lot of people who were formally going to become GISC members in January and February and that the six-strong policy team spent most of its time talking to potential applicants.
Nicholl denied that the shortfall in applicants would cause the GISC financial problems. She said: “The amount of revenue didn't depend on the overall number, but on how big the big ones were.”
Paddick said time would tell how well the GISC would be received but he pointed out that not all the members had signed up voluntarily, with Lloyd's brokers having to become members.