Galbraith brushes off reports that a row led to the creation of London market body.
Biba chief executive Eric Galbraith has moved to quash reports that a breakaway organisation of Lloyd’s brokers was set up in response to disagreements over mandatory commission disclosure.
Following the news that the London Market Brokers Committee (LMBC) was splitting off from Biba to set up a new body, the London International Insurance and Reinsurance Brokers’ Association, there was speculation that the move was the result of a disagreement over whether brokers should disclose their commissions.
London market brokers tend to support mandatory commission disclosure, while smaller and regional brokers typically oppose it. The FSA is currently considering the issue.
Galbraith said: “In Biba, including our London Market Brokers’ Committee and General Insurance Brokers’ Committee, there are no policy differences on our approaches to any issue.
“On commission disclosure, Biba and its LMBC had worked and continue to work together on a market solution in relation to the FSA’s discussion paper. Our position has remained unchanged over the last three years. We believe the current rules and principles are sufficient. Biba continues to lead the sector on a market solution.”
Jonathan Palmer-Brown, chairman of the LMBC, outlined the plans for the new body in a letter to the committee’s members sent last week. All 16 members backed the move. An emergency general meeting will be held shortly to formalise the new organisation.
Asked about commission disclosure, Palmer-Brown said: “A firm like a Marsh or an Aon have different approaches to someone like Towergate, which operates in the UK retail market. So what Biba’s position is, on behalf of its retail customers, and the LMBC’s market brokers, is very difficult to get to grips with. There’s enough diversity within the London market or the retail market, let alone with the two together.”
Palmer-Brown said: “We want to do this the right way. The key issue is that we have different communities to represent and it’s raised itself over some of the issues we’ve had to address. Realistically, what a retail broker in Glasgow wants and what a London market reinsurance broker wants are two different things.
“People want to see what they’re paying for. We need transparency of what is occurring and what it is costing, and that is much easier when it’s much clearer about which community you’re representing.”
Palmer-Brown expected all London market brokers to join the new body. up.