The future of small Lloyd's brokers has been placed in doubt following a stinging attack on the London market by FSA chief executive John Tiner.
In a speech given in New York, Tiner said the London …
The future of small Lloyd's brokers has been placed in doubt following a stinging attack on the London market by FSA chief executive John Tiner.In a speech given in New York, Tiner said the London market would have two years to implement systems that produce policy wordings before contracts are issued, or they would face the strong arm of the FSA. Brokers have reacted by saying that rising administration costs of abandoning "deal now, detail later" practices would suffocate them. "This is just more red tape than some companies can handle," one broker said. "Some of the largest brokers can afford to spend lots of money on policy wording advice and resources, we can't," said a small broker who did not want to be named. Large London market brokers such as Aon and Marsh have developed electronic policy delivery systems based on common document wordings. As these wordings have been pre-approved by insurers they can be issued instantly. It is understood that Kinnect, the Lloyds-backed electronic trading platform, would also rise in market importance under Tiner's regime.One industry insider said larger London market companies would rather have tough FSA regulation than a Spitzer-style investigation that could expose more practice irregularities."Do these big brokers want the FSA trawling back through their policies?" the source said. "They would rather change the way they work and force out the competition that way."Contract certainty would become an FSA "priority", Tiner said, making the transition smooth for all those involved in the process would be a matter for all FSA regulated bodies.
Tiner's top five points