The General Insurance Standards Council (GISC) will write to its members this week, warning them that they cannot refuse to deal with non-members, after the Competition Commission Appeals Tribunal (CCAT) agreed to hear the Institute of Insurance Brokers' (IIB) last-gasp appeal.
The IIB's case against the Office of Fair Trading's (OFT) decision to approve the GISC's rulebook will be heard on July 20 and 23, with a decision expected one month later.
IIB director general Andrew Paddick said because the GISC agreed to contact its members, he did not press the CCAT for an interim order to freeze the GISC. He had previously said if the CCAT refused to hear his appeal, he would abandon his opposition to the GISC.
The GISC statement to members said there was currently no regulatory requirement for intermediaries to join the GISC or submit membership applications. It said: “Rule F42 is proposed to be introduced under transitional rules on September 1. Until then, GISC members are free to deal with non-members as, so far as GISC is concerned, membership application remains voluntary and intermediaries are entitled, if they wish, to operate without GISC membership or appointed agent status.
“GISC expects its members not to misrepresent the position.”
Paddick has written to IIB members to suggest that “any broker who has already made a GISC membership application as a result of undue GISC member insurer influence, [such as] a threat of refusal to supply [or] agency cancellation, should write to the GISC requesting suspension and a fee refund”.
Paddick said he was confident of making an appeal of substance, but that it was prudent for brokers to have a GISC application ready on August 31, should it be unsuccessful.
GISC spokeswoman Catherine Nicol said the CCAT's decision to hear the appeal would make little material difference to the GISC, as membership had never been compulsory until September in any case. She said the GISC was marshalling all its strengths to put its case to the CCAT in July.
An OFT spokesman said OFT director general John Vickers stood by his decision, but would be interested in what the CCAT had to say. “We've still got the view that we made the right decision, but the law sets down that they have the right to appeal,” he said.
“We expected them to be unhappy, and we expected them to do so.”