The FSA should seriously consider making the `wholesaling of insurance' subject to special permission, said the director general of the IIB, Andrew Paddick.
Following the collapse of Scottish underwriting agency Tribune Risk and Insurance Services, Paddick said: "There are a number of highly professional and reliable specialist brokers in the market who offer their schemes to other brokers.
"But unfortunately, in contrast, there are also a lot of very questionable wholesale operations.
"The industry has witnessed scam after scam, year after year, with thousands of consumers both retail and commercial being adversely affected.
"It is far too easy to advertise a facility and collect vast amounts of money from hundreds of intermediaries and then misapply such funds.
"In my opinion, the FSA has a `window' before the final rules are published to make the `wholesaling of contracts of insurance' subject to a special permission, which should involve specific requirements relating to systems and controls, adequate resources and independent audits."
