I am in full agreement with the statement that "the post office should deliver mail, vets cure animals etc" (Letters, 17 April, Insurance Times).

The fact is that for many years insurance was regarded as an easy way of generating a positive cash-flow - the premium was paid, you had the money for anything like four or five months before the insurer asked for it (and of course you could do anything you liked with it - even pay January's account with July's takings).

You did not have to invest in large amounts of inventory, tying up resources. If you could promise an insurer lots of business, it would set up administration centres so you did not need to supply a back-up service - just salesmen - and of course receive commission overriders.

The result was that every large organisation jumped on this bandwagon with the object of selling insurance, not helping customers choose the correct insurance, and the resulting lack of professionalism has resulted in the new tough regulatory regime that we are about to enter.

The ironic part is that these large organisations will have the resources to apply these rules and regulations, while the smaller broker will have to struggle to meet them.

I have noted also that the FSA seems to want to make sure that client balances (in the IBA) will have to be reconciled every 25 days.

I suspect that most brokers receive monthly statements. Is it likely that a broker would "run off with the money" in the three to six days saved?

Why not go the whole way and recommend that the IBA should be balanced on a daily basis?

It almost seems as if the whole raison d'etre of the FSA is to produce ever more stringent rules and regulations, just so it can keep its staff in jobs and show that it is doing something.

John Portwood
B Portwood & Co