Chief executive Tiner criticises IMD as 'one of the worst pieces of European legislation'
Outgoing FSA chief executive John Tiner has called for the European Commission to review the Directive that underpins the FSA's broker regulation.
Tiner, who is set to retire from his position in July, said the Insurance Mediation Directive (IMD) was "one of the worst pieces of European legislation"ever to be drafted.
His comments came as the FSA published proposals to cut back the disclosure rules for direct writers selling some personal lines products.
The proposals prompted strong criticism from sections of the broking community and sparked calls from across the insurance industry for the IMD to be rewritten.
Speaking at the FSA's insurance sector conference this week, Tiner said he would lobby the European Commission to review the IMD's operation.
He highlighted the failure of some European states to implement the Directive and the regulation of some secondary intermediaries, which has "no value".
The regulator this week announced proposals to remove many of the onerous disclosure rules relating to the sale of home, motor and other non-protection personal lines insurance products.
This would remove areas where the regulator had gone beyond minimum European requirements, contained within the IMD and the Distance Marketing Directive.
The regulator said the changes would only apply to insurers selling direct to consumers, as the IMD set minimum standards to be applied to brokers.
The same standards were originally applied to insurers in order to provide "a level playing field".
But the move provoked strong criticism from the broking community who claimed it would increase the relative cost burden on brokers compared to direct insurers.
The AA said the move was "disappointing", easing the cost burden on insurers "at a time when brokers' margins are being squeezed".
Biba said the proposals would "drive a wedge" through the level playing field between brokers and insurers, adding "a significant cost differential" between the two.
The ABI welcomed the move, but said it should apply to "all sectors of general insurance".
Stephen Haddrill, ABI director general, said: "The FSA should do what it can under EU law quickly, and press the Commission to review the IMD urgently to enable a fully principles-based regime to be established."