Two insurers have expressed reservations about the plan by Total Broker Solutions (TBS) to set up a premium utility to handle client money.
Under the plan, the premium utility would be used to collect and reconcile client money, removing the need for TBS members to hold client funds themselves.
But TBS chief executive Mike Williams admitted that two insurers had expressed reservations about the utility, but he declined to say which insurers. He said the concerns were based on a misconception about the benefits of such a scheme.
"The insurers perceive that the FSA's proposed capital requirements for brokers are softening, and so do not feel that the pain for brokers will be sufficiently great to justify setting up the utility."
He said that TBS would argue that the efficiencies generated by the utility, including faster deliver of premium to insurers, would make the scheme worthwhile.
He also countered criticisms that the Beckett Group, chaired by Bob Beckett, who is also chairman of TBS, was not planning to join TBS.
"The Beckett Group is too big. TBS is not a model that would suit the super-regional broker."
