Constitution formalised and code of conduct in final stages
More than 1,000 brokers have applied to join the Insurance Brokers Standards Council (IBSC) which became active on 1 March.
IBSC chair and Seventeen Group managing director Paul Anscombe told Insurance Times that the council had also formalised its constitution and is in the final stages of drawing up its code of conduct.
The code will be centred around the FCA’s principles of business that outline the main regulatory obligations which firms are expected to adopt and adhere to.
It will also on focus brokers’ training and competence, as well as the interactions that brokers have with their clients, other brokers and other stakeholders such as insurers or the FCA.
A consultation paper on the proposed draft code is being sent out to new members within the next two weeks.
Anscombe said: “We are really pleased with the number of commitments we have had.
“A lot of our work is around communication with clients, particularly at new business stage and renewal stage. This is an important step for the profession – we have not had a code of conduct for the past 30 years. In many ways the hard work starts now.
“The world is fast changing and unless brokers don’t stand up and really address their professional standards we are in danger of not being treated as a profession.”
In January Anscombe announced the council was being set up to protect clients and address day-to-day bad practices, by driving up standards among individual brokers in the industry.
Brokers will be required to comply with the code of conduct as individuals and will also have access to council guidance on issues.
But if the council feels there has been a clear breach of conduct and the broker is not complying they could be asked to leave.
“Obviously it depends on the extent of the non-compliance if it is a misunderstanding then that’s a different matter,” Anscombe added.
“What we are talking about here is if there’s a flagrant breach of our code of conduct then we don’t want those brokers as members.”
The code of conduct is also likely to issue guidance about unrated insurers, long-term agreements and breach of restrictive covenants.
Anscombe said: “A lot of these issues are what we expect the debate to be about, but ultimately on any on issue there should be guidance to protect their clients and also themselves as a profession - to raise the standards in the industry and the insurers brokers themselves.”
“You don’t complete the code and stick it in a draw for 10 years – there are always new issues affecting our profession. We want to hear from members and brokers on what the key issues are affecting professional standards so that we can factor that into our practice notes.”
The council will be set up with five committees, including: client, stakeholders, training and competency, complaints, and an overall steering committee. Each committee will meet quarterly.
The council is now considering broker applications and will retain a right of refusal for brokers whose behaviour they have concerns about. The annual fee for brokers will be £15.
Anscombe has previously said that while IBSC is very supportive of Biba and the Chartered Insurance Institute (CII), the trade body for brokers only supports corporate entities, and the CII does not address the disputes and issues that arrive in the market on a day-to-day basis.
In response Biba said it welcomed a debate on raising standards, but thought this was best achieved through the trade association.
The association is also working on finalising its own consultation on professionalism to raise standards across the industry.