John Jackson says an unelected body is swamping us with laws

' If you think that Britain is a democracy and that the insurance industry is regulated by the UK parliament and subject to laws passed through that institution by the elected government of the day, then read on.

Two weeks ago a relatively innocent-sounding front page headline in Insurance Times proclaimed: "Insurers face EC competition survey." The secondary heading read: "Respond to questionnaire or face fines, European Commission tells insurers."

Just what is this European Commission (EC) that issues threats of financial penalties against UK insurers unless it is obeyed?

It cannot be removed by the British electorate, our parliament has no powers over it, nor has our elected government.

It has the sole right to propose legislation at EU level and is responsible for around 70% of the UK's laws.

This is the Commission whose auditors have, for 11 years, refused to sign off its books because of maladministration and fraud, and who sack the whistleblowers, not the perpetrators.

Can you imagine a UK insurer or broker being allowed to trade that long without being closed down and the directors prosecuted?

The EC runs one of the world's most protectionist regimes, with trade barriers erected higher than Canary Wharf. The recent furore over shoe imports into the EU is a case in point. Do I hear mutterings about people in glasshouses...?

In a House of Lords written answer on 30 January (HL 3465), the government admitted that, since the launch of the EC's drive for better regulation in 2004, the number of regulations and Directives imposed on the UK over and above those that had been repealed or had expired, was 423 - that's around one new law a day. Indirectly, many of these laws affect the insurance industry.

In the Insurance Times article, Mark Winlow, a director of consultancy LECG, said the Commission did not understand how the London market worked. That is an understatement. The EC has no idea how any market works, being far, far removed from any competition itself.

As to competition, the UK insurance industry shrinks competitively as insurers swallow each other up, the big ones getting bigger.

As if Aviva was not big enough, it wanted the Pru. City gossip has it that both insurers could now have left themselves open to bids from the likes of AXA, AIG or Allianz. Other insurers are rumoured to be potential take-over fodder. What will all this do for competition? Not a lot.

As insurers become more remote, with too much reliance on technology, with call centres flourishing on the Indian sub-continent, FSA regulation getting worse and now Brussels bullying, one wonders how many players will be left in this industry in a few years' time. IT