FSA boss Hector Sants tells industry summit he would prefer a market-led solution.
See also: What's the solution?
The industry received a boost this week as the FSA declared it does not want to mandate commission disclosure, at a summit called by the regulator.
Speaking to industry figures including brokers, insurers and trade bodies on Tuesday, FSA chief executive Hector Sants outlined his desire for an industry solution to commission disclosure – in light of the regulator’s consultation paper on transparency, disclosure and conflicts of interest in the commercial insurance market, which was published in March.
Steve White, head of compliance and training at Biba, said: “It was encouraging to hear the FSA reiterate their preference for an industry solution. We have always believed that an industry solution is the right thing to do.”
In a separate development, it is believed that the FSA has sent a compulsory questionnaire to select industry figures as it continues its work to identify conflicts of interest in the market.
It is not known how many people will receive the paper, or who the recipients are.
The summit came as the ABI said it was preparing to join brokers in their fight to halt the threat of hard disclosure.
A spokesperson for the ABI said: “The ABI and member partners are discussing the way forward on this and we are also talking to Biba in order to look at what the best way forward on this issue is for consumers.
“In due course we will go to the FSA with some thoughts and some ideas.”
The backing of the ABI will be seen as a boost to the majority of brokers that feel some insurers would accept mandatory disclosure in an effort to lower commissions.
A senior market source added: “The ABI are trying to get the support of all the insurers to say ‘we don’t want it’. They will present a real force to the FSA.”
Eric Galbraith, chief executive of Biba, said: “A number of people in the industry are talking about an industry solution, the ABI are part of that.”
He added: “It is a matter of putting that debate out in the open to make sure that we get this resolved once and for all.”
The industry still has until 25 June to respond to the FSA’s discussion paper.