They say a week in politics is a long time. This would now appear to be the case in insurance as well.

Regarding the appointment of the FSA as regulator of general insurance business, I now understand that neither the GISC nor the IIB were aware of the government's intentions.

One has to ask why the government saw fit not to discuss its actions with the interested parties sooner.

The industry has been forced to absorb what I must assume is a not inconsiderable cost associated with this whole debacle, not to mention the disruption to our businesses in the interim.

In common with many others, Eastern Alliance members have spent considerable amounts of time and money establishing the frameworks to ensure compliance, not to mention the costs associated in having stationery reprinted and websites redesigned. One would hope that this has not been entirely wasted.

Few would doubt that the GISC and IBRC Mark II regulatory frameworks are models for good business practice. But I am still left with an unresolved question. Why could it not have been accomplished through the existing regulator, the IBRC?

The answer is of course that it could. What I am unable to fathom is why it was not allowed to. What other agenda was at work and to what purpose, or is that too deep?

I have heard it said that being a member of either GISC or IBRC Mark II will, in time, assist in the process of entry into the FSA, but this has yet to be tested.

Where do the companies' direct sales operations and other so-called insurance providers sit in all this?

At a time when public confidence in our industry is at a low ebb, I believe the current state of affairs serves only to reinforce a view of confusion and ineptitude, not on the part of the GISC, IIB or insurance brokers in general, but in government and the civil service.

Regrettably, I doubt that the buying public will draw this distinction.
Grant Taylor ACII
Chief executive
Eastern Alliance

Follow the GISC road
The announcement by the FSA is no surprise: just earlier than expected. It is perhaps a credit to the GISC that the FSA has felt confident enough of the way in which the GISC is conducting itself that it can make an announcement at such an early stage .

Let us be clear, the move is prompted by Europe as much as by the UK government and in the manner that the regulation becomes statutory. Let us also be clear that the FSA should have the mechanism to achieve this without rafts of new legislation.

On the matter of cultures, we have been substantially impressed with the work of David Jackman and others over the last few years and in particular the announcement that, post-N2, the FSA will be looking to risk-based regulation, which is the model of regulation that the GISC has adopted.

We have to be realistic. Regulation is now an industry, but if practitioners are treated with respect and they, in return, adopt the models of compliance then it is reasonable to accept the FSA will devote far more time to those who see themselves above the need to conform than with those who comply.

The initial indications are that the change will apply to intermediaries dealing with two providers or more, but can it really be the case that the FSA should not also monitor the sales and service process of providers?

If indeed it is the case that the IIBRC is not to be, then the message seems clear. Follow the GISC road.
Robin Wood
RW Associates

Size doesn't matter
While the benefits of belonging to a network are quite apparent to smaller intermediaries, our experience shows that large brokers are not impervious to hardening market conditions and increasing demands on the business.

Certainly over the past few months we have seen an unprecedented level of inquiries from brokers with gross written premiums in excess of £5m and these businesses now account for an increasing percentage of the overall Broker Network membership and it continues to grow. Although these brokers generally enjoyed good relations with a number of carriers, top level facilities with the carriers and access to the wider market was by no means assured.

And then there's the question of training, GISC compliance, IT platforms, marketing, the list goes on. It's unreasonable to expect most brokers to have these resources in-house which is why outsourcing to a network is becoming very attractive.

Networks were first set up to support smaller brokers - but in today's climate, size doesn't matter.
Grant Ellis,
Managing Director,
The Broker Network

Mistaken identity
The news item headed "What they said about FSA taking over broker regulation" (Insurance Times, 20 December), appears to be based on the Treasury press release and refers to IIB. In fact, the release mentions the MCCB (Mortgage Code Compliance Board).

Your piece gives the impression that Ruth Kelly hopes that the IIB will be able "to work closely with the FSA to ensure a seamless transition". That is not what is stated in the press release.
Catherine Nicoll
Head of Communications,
General Insurance Standards Council