I refer to last week's issue, which stated that Lloyd's decision to require it's market brokers to join the GISC was a severe blow to attempts by the Institute of Insurance Brokers to set up a rival regulatory regime by continuing the IBRC.

This is most certainly not the case at all and the Lloyd's announcement was expected.

We have never ever sought to facilitate regulation of the Lloyd's or London wholesale/international markets – although we could be receptive to establishing a special division of IBRC MkII, if this is what a viable number of Lloyd's brokers want themselves (and there have been a number of initial approaches by those with a more professional outlook).

In my opinion, this is largely a matter for the Lloyd's Insurance Brokers Committee (LIBC) to resolve amongst it's own membership - many of whom do not consider themselves to be professional insurance advisers, but more akin to market traders. Ask any young lad or gal coming out of "the room" what IBRC, GISC, BIBA or, IIB stands for and the chances are they have not got a clue, neither do they care!

At present, Lloyd's brokers face a hybrid system of regulation. As insurance brokers they must be properly registered/enrolled under the provisions of the Insurance Brokers (Registration) Act 1977. However, as they are controlled by Lloyd's, dispensations exist whereby they do not have to submit accounts or PI policies to the IBRC - as these aspects of their regulation are currently directly monitored by Lloyd's.

This raises important statutory issues until 30th April 2001. If Lloyd's ceases to monitor broker accounts and PI policies before the date of repeal, then, presumably the dispensation must be withdrawn by the Registration Council and Lloyd's brokers required to make direct submissions to the IBRC – failing which they could be struck off for non-compliance.

What is actually being suggested, by both Lloyd's and the GISC at present, amounts to no more than attempting to jump the gun:

1. Lloyd's wants to rid itself of the expense of broker regulation as soon as possible - all part of the constant cost cutting exercise this beleaguered market needs to pursue, if it is going to have a fair chance of survival in the medium to long term.

2. The GISC is desperate to raise some revenue from the mega brokers as soon as possible - according to insurer insiders' there is not much left in the kitty and they are reluctant to put any more in.

It is simply ridiculous for Lloyd's brokers to join the GISC as regulated firms before the appropriate date. In particular, they will be fully accountable to the IBRC until 30th April 2001 - not only the date of repeal, but also the date on which "enrolled body corporate" annual IBRC fees expire. Until this time, the IBRC is responsible (and the Indemnity & Grants Scheme exposed) under statute for the activities of Lloyd's brokers. Which leaves only two sensible alternatives:

a) Lloyd's continues broker regulation until 30th April 2001.

b) The GISC takes over the role of monitoring Lloyd's broker accounts and PI policies (perhaps as Lloyd's agent) from the January 1 2001 until April 30 2001 – dependent upon IBRC dispensation to do so, to the Council's satisfaction, paying due regard to the interests of all members of the profession generally.

In the meantime, my Institute is cracking on with the sensibly improved IBRC MKII.

Later this year/early 20001, all UK non-Lloyd's brokers, will be presented with a proposition, to secure their professional identity and regulatory future.

The ultimate choice will be theirs and theirs alone – membership of a professional body or, the GISC along with all and sundry.
Andrew N. Paddick
Director General
The Institute of Insurance Brokers

Conflict of interest?
It was interesting to read that the CIS believe that insurers can't hide from the public. It was also alarming to read that Lloyd's will insist on their brokers registering with the GISC.

What's the connection? The GISC monitors, PricewaterhouseCoopers and Ernst & Young, guardians of the public interest, are also appointed auditors to some of the largest insurance organisations – the very ones that they are supposed to monitor. Conflict of interest or what?

I am assured that their ethics are beyond reproach, but what happens when that conflict of interest rears it's ugly head – as it surely will? Both companies were advisers to both the CGU and Norwich Union, so who would be the independent monitor for the new CGNU?

If we are to believe that the GISC is there for the benefit of the consumer this is a situation that cannot be allowed, unless both monitoring organisations publicly declare their conflict of interest when it arises.

I doubt that will happen so the insurers will still be hiding from the public, but will the GISC be accountable for sanctioning this unacceptable conflict of interest which flies in the face of logic and the principle of independent monitoring?
A.Hall ACII,
Chartered Insurance Practitioner

'Cop' comments mislead?
Re: West Midlands Police Force Intruder Alarm Response Policy

Comments made in the article 'Insurers Gripe at Unfair Cop' (May 25) are misleading and may lead to concern among policyholders.

In response to the intention of West Midlands Police Force not to attend unconfirmed intruder alarms between 6am and 7pm, Monday to Saturday, we are advising members to assess the situation on a case-by-case to see whether additional security precautions are required.

If the new policy is introduced and if a loss occurs, the attitude of the insurer would depend on the individual case, and whether the lack of police response contributed to the loss.

It is also too early to say whether this move will lead to increased premiums; it is more likely to lead to increased security requirements on policyholders, rather than higher insurance costs.

We are currently in discussions with the West Midlands Police Force and the Association of Chief Police Officers, in an effort to achieve a solution which recognises the interest of stakeholders.
Chris Mounsey,
Manager, property and household,
Association of British Insurers

Gould's air of mystery
The mystery man, Jonathan Gould, must surely be the famous John Gould, editor of Heating & Ventilating Review, one of those publications that, unlike Insurance Times, is full of hot air.

Insurance PR people will surely vote for him, just as they have been known (so I'm told) to send the wrong press releases to the wrong media.
Martin Francis,
Albion PR

A head of the rest
Just to say congratulations on the "Argent holds its head up (in East)" headline on page 5 (June 1 issue) I hope I'm not the only one old enough to appreciate it.

PS: Not so sure about the "Daytrippers for CII hop" headline, though.
Ian Ritchie

A head of the rest
As the dual pricing debate continues, we have yet another example of the outrageous difference between Norwich Union Direct and premiums quoted through brokers

The case in question happens to be the daughter of the Chairman of one of our major commercial connections and there isn't any justification in the enormous discrepancy.

The basic facts are: Vehicle: Volkswagen Polo CL 1300 c.c. 1998 model. Age of insured - 18. Postalcode - AL6 OEP Provisional Licence Holder and a Student. Norwich Union Direct - £692.00 comprehensive, broker quote – £1,890.79 third party fire & theft

On the same day, we received renewal terms on a well-run NU Fleet at a 30% increase. What an absurd situation.
Roger Jordan