The Institute of Insurance Brokers (IIB) did not wreck the General Insurance Standards Council (GISC).

It is a tragedy that the GISC persistently refused to discuss granting a waiver to its proposed Rule F42 with either the IIB or the Association of British Travel Agents (ABTA). Such a waiver would have permitted GISC member insurers to trade with insurance brokers properly regulated by the Insurance Brokers' Registration Council (IBRC) Mk2 and travel agents regulated by ABTA in respect of travel and related insurances only. The GISC could then have cracked on and forced every other insurance outlet in the UK into membership, which would have closed the circle.

This would not have opened the door to a host of other aspiring regulatory bodies, simply because there were none and, even if there were, they would have been out of time to appeal and the negative clearance (albeit now judged to have been wrongly granted) would have stood – allowing F42 to be enforced against all but the IIB and ABTA-regulated communities.

The GISC made a monumental error of judgment in its quest to secure a monopoly and has got itself into a mess by way of its intransigence in this regard. Not only has it lost more than £250,000 in legal costs by intervening in the appeal (which it did not have to do), it has lost the power to forcibly regulate all those firms outside of the IIB and ABTA – to which the IIB never objected (despite its reservations regarding the Competition Act). We would not have appealed on behalf of those we do not represent.

Interestingly, in an interview with Insurance Times before the judgment was delivered, GISC chief executive Chris Woodburn correctly predicted the IIB would win the appeal. Why then did he spend £250,000 of members' money intervening in a lost cause?

If anyone thinks I have enjoyed the past year, they are wrong. It has been an exhausting nightmare, burning the midnight oil week after week. A glass of bubbly at the end was not much consolation.

Once again, I shall be offering the GISC talks, in a most sincere attempt to achieve an orderly UK general insurance market that operates in the consumer interest, which is what I have always wanted. Recognising that those full-time professional firms of independent insurance advisers, commonly known as brokers, should have the right to regulate and differentiate themselves from the enormous miscellaneous crowd of retail insurance outlets – which was recognised by the Competition Commission Appeals Tribunal (CCAT) in its judgment.

In this regard, we are now cracking on with IBRC Mk2, for “professional independent insurance advisers” only.
Andrew Paddick
Director general

Thank you
As an American living and working in the UK, I want to thank Insurance Times for the sympathy and support shown in your September 20 issue. It was much appreciated.
Tony McKinnis
Enterprise Rent-A-Car

0845 scandal
May I draw your readers' attention to a scandal perpetrated by some of our so-called friends in the insurance industry who insist that when we contact them by phone it is on a national-rate 0870 number.

Bearing in mind the long delays in getting through to some insurers these days, I find it galling that they should be earning money the longer they keep us on hold.

Why don't these insurers offer us a local rate 0845 number? We have just purchased one such number for a one-off outlay of £150, plus £200 a year service charge. This means our customers pay only a local call rate and there is no additional cost to us. Surely if we, a small insurance brokerage, can afford it, these mighty insurance companies can.

Come on, insurers – it's bad enough to be kept on hold for ages while you get around to answering our call, but please don't make us pay for the privilege.
Tony Jewitt
Managing director
Avis Insurance

Matter of expenses
I refer to the WiseCall article in Insurance Times (September 13) and, in particular, the statement made by Seth Lovis that, under the CFA Agreement 2000, there is a requirement to check if clients have legal expense insurance and the claim that his firm carries out these checks.

I am aware of a number of my clients who have been referred to Seth Lovis & Co by Highway and Crusader. However, WiseCall has received no correspondence from Seth Lovis asking for our permission to grant legal expense cover to any particular client.

I'd be interested to know, therefore, exactly what checks Seth Lovis & Co makes?

I have had detailed correspondence with Highway/Crusader on this point. The check should begin when an accident is reported to Highway's first response unit. They should ask the client if they have legal expense cover and direct that client to either their broker or legal expense company.

Unfortunately, they do not do this. If there is an injury disclosed or a requirement for credit hire, the client details will be passed to Crusader ULR. This is done without the knowledge or permission of the client, who does not have a legal expense policy with

Crusader ULR. Crusader then refers the injury cases to Seth Lovis Solicitors, which handles them on a CFA basis.

Highway/Crusader are aware of the broker details from the claim form. Why do they not ring the broker to ask the simple question, “Has this client got legal expense cover?”

If the broker says yes, Highway/Crusader should direct the claim to the appropriate legal expense company. It should not be sent to Seth Lovis to be dealt with on a CFA basis.

With regard to Stuart Davies' comments about “complainants”, there have been numerous occasions when I have been advised by brokers that when they have complained about the Crusader practice or have told Highway they did not want Crusader to be involved with their clients. Will Highway not respect this wish?

Before the ABI regulated credit hire rates, Highway was extremely difficult and awkward about settling credit hire claims.

I would, therefore, assume it would have adopted the same attitude towards CFA claims and third-party solicitors' costs.

However, the hypocrisy here is that Highway/Crusader and Seth Lovis are encouraging CFA claims against other insurers. Surely this must be something the insurance industry cannot and will not accept.
Donald C Rodger
Managing director
WiseCall Claims Assistance
Tyne & Wear

Committed to the GISC
Over the past four years, following extensive consultation, the vast majority of the insurance industry has devoted considerable energy and resources to building a credible regime of self-regulation – one that services the best interests both of the industry and its customers. That regime is the General Insurance Standards Council (GISC).

The GISC has deliberately been established with all the infrastructure necessary to be an effective regulator.

It is independent of industry trade associations, has a recognised structure of governance that is continuing to develop with industry guidance and has proper and effective systems for monitoring and enforcing compliance.

It will encourage higher standards within the industry through the promotion of best practice and provide a consistent level of consumer protection, however the product is distributed.

The CCAT has upheld the appeal of ABTA and the IIB against the OFT's negative clearance of the GISC regime – it has not ruled on the merits of the GISC itself. The OFT and the GISC will now consider their responses. This will inevitably take some time.

In the meantime, it is imperative that the industry continues to be fully committed to the success of the GISC. The GISC already has 5,689 members and 1,259 applications for membership pending. These member firms account for a very large proportion of general insurance sold in the UK.

The Association of British insurers (ABI), British Insurance Brokers' Association (Biba), London Market Insurance Brokers' Committee (LMBC), Lloyd's and the Association of Insurance Intermediaries and Brokers (AIIB) continue to be fully committed to the success of the GISC and look forward to working over the next few months with the GISC executive to solve any outstanding issues.
From Malcolm Tarling on behalf of theABI, BIBA, LMBC, Lloyd's and AIIB