Broker leader Andrew Paddick is demanding the General Insurance Standards Council (GISC) opens its books for scrutiny as the the price for its exemption from the Competition Act.
The call was made this week after the GISC lodged its formal notification with the Office of Fair Trading (OFT), the Government watchdog it needs to win over to become a compulsory body for all general insurance sellers.
Paddick, the director-general of the Institute of Insurance Brokers (IIB), who is opposed to the GISC, said the demand for absolute transparency was justified since the GISC was seeking to create a regulatory monopoly.
He is insisting the GISC should submit to full disclosure of its meetings, funding and constitution.
The IIB has lodged an objection to the GISC's application for its rulebook to be exempt from the Competition Act, which bans anti-competitive trade agreements. He is also considering legal action.
Paddick said: “We are calling for full transparency in the GISC's dealings. We want to know who its financial backers are, its motives for the way its approaches regulation and its payments to GISC board members.”
He said that unless full disclosure was forthcoming, the insurance industry would not be able to challenge potential conflicts of interest that may arise over GISC decisions. “There is soon going to be a whole string of contracts, which the board will enter into with third parties,” said Paddick.
A spokeswoman for GISC said it was planning to publish an annual report and accounts, but not until December.
And she said the self-regulatory body had no immediate plans to disclose the minutes of its meetings because this was not normal practice for a commercial enterprize.
Moreover, she added that GISC was unlikely to reveal the salaries of its paid board members – chairman Anthony Howland-Jackson, chief executive Chris Woodburn and its two non-executive directors, Baroness Dean of Thornton-le-Fylde and Dr Oonagh McDonald.
The OFT this week confirmed it had received an application from the GISC, asking for clearance of its rulebook from the Competiton Act's requirements.
This includes the GISC's controversial Rule 42, the so-called glue of self-regulation, which insists that GISC brokers and intermediaries deal only with members of the regulatory regime.
The director-general of fair trading has the power to exempt some anti-competitive agreements if their costs are outweighed by their benefits to consumers. He can also attach certain conditions to any exemption.
A spokeswoman for the OFT could not specify whether these additional conditions may include the full publication of the GISC's financial affairs. She said: “Our function is to examine the issue of competition, but we are unable to speculate on any possible conditions which may be attached before we have reached a decision.”
The OFT said it could take up to six months to make a ruling on the GISC's case.