Struggling regulator the GISC this week launched its rulebook, almost unchanged from the March outline proposals, and immediately ran into a hail of criticism.
Lloyd's broker Miller claimed the Lloyd's regime would be weakened by switching to the GISC.
Miller said: "This will result in lower regulatory standards. In light of this Miller believes Lloyd's accreditation and monitoring procedures become critical to ensuring the standards that underpin the Lloyd's name are maintained."
The GISC said: "If Miller actually reads the rulebook and is visited by our appointer monitors for Lloyd's brokers (Ernst & Young) it will be reassured that the standard of regulation is as rigorous as it was under Lloyd's."
A spokesman for Lloyd's said: "Our view is that we have complete faith in GISC to regulate our brokers efficiently. We have studied their standards and are happy with them. We are happy for them to regulate our brokers and would take umbrage at the suggestion of a lowering of standards."
The new regulator was also heavily criticised by IIB director general Andrew Paddick after the new body sent application packs to IBRC brokers. Paddick said: "What concerned me most is that they have sent insurance brokers membership applications. I don't know why they are trying to confuse brokers because the IBRA does not get repealed until April 30 2001."
GISC responded that it was giving brokers the opportunity to join if they wanted to.
Axa chief executive Andy Homer leant support to the new regulator, saying Axa will encourage all brokers and intermediaries, particularly its top 150 brokers, to join the new regulator. He said: "The recent move by Lloyd's to make membership mandatory is a very, very strong leadership statement and I think that will help convince intermediaries to make the necessary switch."
But the Axa boss also hinted that his eventual decision on whether Axa will work exclusively with GISC-registered brokers will be based on the critical mass of members the regulator achieves. "At the moment it is not a commercial decision, but it could become a commercial decision in the future," he said.
Financial Services Ombudsman Walter Merricks cast doubt on the GISC's ability to handle consumer complaints.With just three weeks to go, Merricks confirmed the GISC had not yet agreed how it would handle complaints. He said: "GISC is just getting underway and it's not been plain sailing. We are talking to GISC to help them set up an interim scheme."
Chief executive Chris Woodburn said: "All we are able to do at this stage is to advise people what the rules are. If it looks as if they have not been observed, we can send in the monitors. At the moment we cannot make financial awards against brokers and intermediaries."
GISC has seconded two members of the Financial Ombudsman Service. They will start work at GISC at the end of June, one week before the regulator begins operations.
