The General Insurance Standards Council (GISC) will not be compulsory until at least mid-2002, following the Competition Commission Appeals Tribunal's (CCAT) decision on Monday.

The rules were originally due to come into force this month.

The CCAT upheld the Institute of Insurance Brokers' (IIB) appeal against the Office of Fair Trading's (OFT) decision to give the GISC negative clearance under the Competition Act 1998.

OFT director general John Vickers had previously decided the GISC was suitable for negative clearance because it did not perform an economic activity. But the CCAT's 75-page report said his decision was "erroneous in law".

The GISC now has the option of pursuing its original application for exemption from the Act.

Two weeks ago, GISC chief executive Chris Woodburn pre-empted Monday's decision and said the OFT would take about four months to consider a further application.

But IIB director general Andrew Paddick vowed to launch "another robust appeal" should an application for exemption be successful.

Given that the OFT would take four months to consider a new application and the CCAT took three months to hear the IIB's appeal and come to a decision, it could be at least seven months before the GISC is able to bring Rule F42 into force. The rule will allow insurers to refuse to deal with non-GISC member brokers and intermediaries.

Woodburn said the GISC was disappointed, but gave no guarantee it would seek an exemption. "We'll give careful consideration to the CCAT decision, particularly in the context of how effective regulation is to be achieved across the industry," he said.

The OFT was "considering the decision", but would not comment further.

The British Insurance Brokers' Association (Biba) said it would continue to recommend GISC membership. A spokeswoman said: "With or without Rule F42, it is clearly established as the regulator for general insurance."

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