Insurers warn that FSA compensation levy hike threatens viability of intermediary sector
Leading insurers have added their backing to the Insurance Times ‘Fair Fees: Brokers won’t pay for banks’ campaign.
As responses continued to flood in this week to the online Fair Fees petition, Aviva, RSA, Brit, Groupama, Fortis and AXA all threw their support behind the campaign to reform the FSA’s system of fees and levies.
Aviva said that it supported the campaign on the grounds that crippling fee and levy increases threatened the viability of the intermediary market.
UK general insurance chief executive David McMillan commented: “Aviva supports the need for different regulatory approaches to banking and insurance. We believe this can be best achieved through a system of regulation that is built around customer outcomes, acknowledges the significant differences between the banking sector and insurers, and reflects the different risks, business models and activities of the two industries.”
Fortis UK chief executive Barry Smith said: “Brokers deserve a fair deal on fees and they are rightly making their voices heard. Whichever way you look at it, the increases do not look equitable. We support a review of the Financial Services Compensation Scheme and will back brokers all the way.”
Groupama managing director Laurent Matras also voiced his support. "I have been reading the coverage of the campaign with interest and it certainly seems clear that many brokers feel strongly that the current charging structure is not as fair as it might be. It is pleasing that BIBA and IIB are already highlighting such regulatory issues to the new government and these representations form a very valuable part of the debate."
RSA commercial managing director Paul Donaldson added: “I support the brokers and the campaign.”
Commenting on the recent fees and levy hikes, AXA customer service director Paul Meehan said: “It is totally unfair and will result in a lot of brokers going to the wall or being forced to get out. It is just the worst timing. 2009/10 is the worst period that we have seen for brokerages. This is just another nail in the coffin.”
Brit Insurance director of UK market management and regional operations Simon Cooter added: “We encourage the FSA to consider its charging policy carefully for the good of the entire insurance industry and its customers.”
The campaign urges the FSA to give a fair deal to brokers in its review of the Financial Services Compensation Scheme later this year. The total number of supporters had topped 250 when Insurance Times went to press this week.