Treasury announces broker regulation plans

Economic Secretary Ruth Kelly announced this afternoon that the Treasury's consultation document on the Insurance Mediation Directive is to be released today. The document can be viewed by clicking here

Economic Secretary Ruth Kelly told parliament this afternoon that the Insurance Mediation Directive, upon which the Treasury has just released its consultation document, would bring new opportunities for brokers.

"Consumers will benefit through increased protection and better quality advice (and) industry will benefit through the simplifying and streamlining of regulation," Kelly said.

"There will be new opportunities for brokers as they will be able to compete for business in other EU countries."

As part of its consultation, Kelly said the Government would consider whether to regulate travel insurance sold as part of a package with holidays.

"The Treasury will be consulting about whether to regulate travel insurance sold as part of a package," she said.

"The Government needs to weigh fairly the competition issues between those intermediaries that sell travel insurance direct and travel agents that sell insurance alongside a holiday.

"It's important that the government gets the right answer in a very important market which is why we are seeking evidence and views as a part of this consultation process."

The consultation document suggests the use of Designated Professional Bodies (DPB), whose members could sell a limited amount of insurance without needing FSA authorisation.

If this was to be adopted, the Association of British Travel Agents could become a DPB, allowing travel agents to sell travel cover without regulation.

However, ABTA would have to be prepared to regulate its members in this regard.