The Institute of Insurance Brokers (IIB) is changing the criteria for acceptance as a member which will allow the board to blackball undesirables.

The broker trade body will also ask members to approve being overseen by the new regulatory authority it will set up, which will directly replace the Insurance Brokers Registration Council (IBRC) when it's founding act is repealed next April.

Eligibility for membership is to be changed to those "who satisfy the eligibility for membership as shall be prescribed by the board of directors of the company from time to time".

The provisions for bringing in regulations to replace the IBRA rules say: "... it is envisaged that proposed members will in the future be required to be regulated by this new authority to be eligible to be admitted to membership of the company".

Andrew Paddick, the director general of the IIB, said members had nothing to worry about from proposed changes.

"It is just a formality," he said.

He added that the changes were legally required as the Insurance Brokers Registration Act was going to be repealed in the middle of two of the company's AGMs and therefore the references to it in the memorandum had to be changed.

But an IIB member, Ian Mantel, principal of Manor Insurance, said he was concerned about the form the replacement for the act was taking.

"It seems as if the IIB is asking members to commit to an unknown regulatory body. A body which the IIB looks as if it will control. Thus membership of the club will be dependent on the club-owned regulatory body approving of you."

Paddick denied that it was an attempt to transfer power to the board and said if there was considered to be a problem with the amendments, an extraordinary general meeting would be called.

Mantel also voiced concerns about Broker Direct, as anyone dealing with the company has to be an IIB member and therefore subject to its regulations. A spokesman for Broker Direct said there were no plans to change the requirement of IIB membership.

But he did say the company may not be subject to the IIB's new regulations. "We won't necessarily follow what the IIB is bringing in," he said.

"Broker Direct is a separate trading company."

Cornhill Insurance, a major shareholder in Broker Direct, said it was too early to say whether there would be any problems with the company not being regulated by the General Insurance Standards Council (GISC).