We've got what we asked for so why keep moaning
We've got what we asked for so why keep moaning
As a registered broker I have always been keen to see sensible and practical regulation of our industry. I believe that most others feel the same way.
For too long brokers have moaned about an uneven playing field. We've all been guilty to a degree of smugly pronouncing how wonderful we are and questioning why independent intermediaries are allowed to trade with so little regulation? This has largely been redressed by the ABI monitoring procedure, and with the AIIB and Biba encouraging professional practices.
However, now that we are being offered a level playing field, I find myself being told that brokers have no wish to participate. This is a total mystery to me (after all there are brokers on the board of the GISC). The change means that check-out staff will no longer be able to sell or offer advice on general insurance; it means that we all have the same fees structure and the same auditing procedures; and it benefits the consumer.
If we accept that regulation of the sale of general insurance is a good thing, surely we must accept that unified regulation is better than the current hotchpotch? Why do some people wish to perpetuate this mess?
The demands of brokers have been heard and accepted. This shows that the GISC is more responsive than other regulators to industry needs. We have seen the GISC set realistic membership fees for smaller firms. The rate is currently nearly half that paid by a larger insurance broker. But still there are touch-line voices calling ‘foul!'.
There is one point that brokers must consider – well, IIB members anyway. If the proposal to restrict IIB membership to IBRC Mark 2 members is realised then all IIB members will need to pay two sets of fees and have two regulatory bodies. This means that IIB members will be back to the uneven playing field. Consider further the member who wishes to resign from IIB membership yet wishes to retain his Broker Direct shares and a problem may become apparent. Take this one step further and we see that this same broker will be paying fees to a regulator, membership to an institute, and creating profit for an underwriter with one common denominator – can anyone guess what that is?
Finally, regarding polls, as we all know, if you word it correctly you'll always get the answer you want. Surely the only polls that can be taken seriously are those that are independently overseen, and as has been seen recently, even these can cause problems in some parts of the world.
Ian K Mantel
Manor Insurance Services
Survey totally biased
Is the IIB the banana republic of insurance?
I was interested to read in Insurance Times, November 30, that Andrew Paddick was to reveal the results of the IIB's survey of all IBRC registered brokers at a House of Commons reception. No doubt that event will be widely reported in this edition.
I am an IBRC registered broker, and as a result I received a copy of the survey request from the IIB. However I did not feel able to respond. For a survey to have any validity it must be conducted in an even-handed way. For the benefit of your readers who were not in receipt of the survey, I reproduce below the relevant section of the document I received.
a) To support the continuation of the IBRC administrative infrastructure (operated by this institute) as an exclusive self-regulatory body for “independent professional insurers and risk advisers” only
b) to be regulated by the GISC along with 30,000 miscellaneous insurance and sales outlets of every description (including those previously “struck off” by IBRC for serious breaches of the rules and a vast number of intermediaries that never came up to IBRC standards in the first place).
There follow two pages of totally biased rhetoric in favour of IBRC continuation (operated by the IIB of course) and against GISC.
Interestingly, however, the questionnaire which respondents were encouraged to complete and return contained little other than “do you want to retain IBRC or join the GISC?”. Anyone examining only the responses would surely conclude that the survey was nothing other than representative.
I trust therefore that any conclusions that the IIB suggests can be drawn from this survey are taken with a large pinch of salt.
The Broker Network
GISC dominant by spring
As chairman of the GISC I have, up to now, purposely refrained from reacting to articles about regulation of the general insurance industry and the GISC in particular. However, following your article of November 30, Early Poll Lifts Axe from IBRC, I feel it is time to clear up some misunderstandings.
First, there is no evidence whatsoever that the repeal of the act, scheduled for April 30 2001, will be delayed. Our information is that the government will proceed as planned, whether or not a May election is called.
Second, it is quite clear that any survey aimed at a particular sector of the industry will produce results that will not be representative of the industry as a whole. To give credence to such a survey is to misunderstand both the concept and the mission of the GISC.
The GISC was conceived in response to the government's call for the industry to create a single body that was independent and which took the interests of the industry as a whole, and its customers, into account.
Two major consultation processes took place, to which most sectors of the industry responded. Working parties, whose members were drawn from all sectors, were set up to ensure the widest possible input. IIB is the only insurance trade association which has not contributed and continues to refuse to contribute to the GISC initiative, despite having been invited to do so.
To achieve the objective set out by the government and to demonstrate to our customers that the industry is committed to, and can deliver, the high standards of service to which they are entitled, requires one independent and competent authority. For that authority to carry out its duties responsibly, it must have all the ingredients of monitoring, enforcement and disciplinary processes that are part of today's regulatory requirement. The GISC is the only body that has those ingredients and a chief executive with extensive regulatory experience who will apply them within a culture that is corrective rather than punitive.
Third, the membership department of the GISC has never been as busy as it is at present. To create the GISC has cost money and we are fortunate that the major players throughout the industry have seen fit to support the funding of the GISC. Our membership numbers are 686, and 103 applicants are awaiting admission. In addition, over 700 businesses have requested application packs in the past six weeks. It is well known that the ABI, AIIB, Biba, LIBC, Lloyd's and the IUA are in full support, and those already signed up account for in excess of 75% of the general insurance business conducted in this country. Biba and AIIB, having recently resolved all outstanding issues with the GISC, have written to their members giving unconditional support and recommending that they join now. Furthermore, commitments have been received from high street financial service providers, and positive discussions continue with major retailers.
Working parties will remain in place to ensure that specific industry issues are considered fully. On receipt of OFT clearance the board will manage carefully the implementation of Rule F42, giving effect to one coherent regulatory regime, which we believe will be in the best interests of consumers. By the spring of 2001 we are confident that the majority of the industry will be on track to be part of the GISC.
Anthony Howland Jackson
Have a go at Harvey 1
Malcolm Harvey's comment in Insurance Times, November 16, that the ultimate decision for the appointment of a professional advisor to represent the policyholder rests with the broking community is incorrect.
The following facts relating to a loss adjuster and a loss assessor should be placed before the policyholder for their decision as to whom they wish to appoint.
Loss adjusters have obtained their degrees by having five years in practice within a firm of chartered loss adjusters acting solely on behalf of insurers and passing the institute's examination, and they must act impartially (which is self contradictory). It is also not a part of their training to prepare the claim, but to adjust.
Loss assessors act solely on behalf of policyholders suffering losses. They have gained the experience of preparing detailed claims and negotiating satisfactory settlements by being employed for many years with an established firm of loss assessors.
They became qualified by the experience obtained. The definition of “qualified” referring to Collins concise dictionary is “having the abilities, qualities, attributes, etc. necessary to perform a particular job or task”, which is what an experienced loss assessor has.
If Mr Harvey will refrain from denigrating our profession then this could be the end of the saga.
Henry M Harris
Harris Claims Group
Have a go at Harvey 2
I have read Malcolm Harvey's reply in last week's edition and note he has avoided answering the import of my letter. To refresh his memory the question can be crystallised thus: “Do loss adjusters have the necessary set of skills needed to prepare a claim and represent a claimant?”
Clearly they do not, having worked previously for insurers adjusting claims prepared and presented by others on behalf of claimants.
I shall be more than interested to see if he can actually answer the question.
Wiseman & Company Loss Assessors