David Bland, outgoing Chartered Insurance Institute (CII) director general, dominated the headlines in the first week of May when it was alleged that he had been ousted in an institute coup. Reg Brown, the then CII president denied it was a coup and said: “Mature people discuss these things and a mature discussion led to him (Bland) leaving.”
Brown admitted he prompted the discussion when he began his presidency. “You start off by saying ‘what are your ambitions ?' and finally the decision was taken, after a couple of months he would retire.” The story prompted a series of letters asking why the Society of Fellows hadn't been involved in the decision.
It was also reported in May that growing numbers of brokers had embraced the internet revolution but many had concerns over its cost and security for financial transactions according to an independent survey of Biba members.
Other technology news came with the message “I love you” when a catastrophic email bug hit the world. Speculation rose about whether it would result in a flood of claims. Julian James, managing director of Lloyd's in North America, said damage estimates of the Love Bug had been put down to £10bn worldwide, most of which was uninsured.
The regulators went head to head in May when the IIB was set on a collision course with consumer groups, the Treasury and insurers after it voted to continue the Insurance Brokers' Registration Council (IBRC) as a self regulatory professional body.
The move flied in the face of industry attempts to set up the GISC and consumer groups voiced alarm saying that two regulators would be confusing. The step by Paddick
came after talks with European Commission officials in Brussels. Paddick said the
EC directive on cross-border insurance broking left room for more than one regulator.
Also this month Drake was forced to cease trading by the Financial Services Authority after failing to maintain the required margin of assets over its liabilities. The move was believed to result from a major American capital provider refusing to offer additional backing. Drake sold private motor insurance through approximately 2,000 brokers and intermediaries nation-wide and some 200,000 policyholders were affected by the news.
The dual pricing debate also fuelled up again in May when a handful of renegade brokers forced the Office of Fair Trading (OFT) to investigate dual pricing in the market. The unnamed brokers contacted the OFT complaining that insurers had flouted the new Competition Act by charging higher premiums through brokers than through their direct arms.
An OFT spokesperson said: “We have had complaints from a number of brokers over a period of time; Norwich Union has been named, but so have a couple of other companies.”