GISC chief executive Chris Woodburn says the new regulatory regime to be unveiled next week will not be onerous - but it will have teeth.
Speaking at the Chartered Insurance Institute (CII) conference in Harrogate last week, Woodburn's remarks left his audience unsure of just how tough the new code will be - and eager to see the guidelines for themselves. They also provoked Andrew Paddick, director-general of the Institute of Insurance Brokers to argue that GISC will not be able to impose uniform standards for years.
"We're not going to have muscular regulation, IMRO style," said Woodburn. "There will be no strutting about by my staff - and no kicking down of doors. We will not be filling the courts with recalcitrants from day one." He added: "The regulation will be at least as rigorous as under the IBRC - for example, professional indemnity will be required of everyone. And there will be a four-year inspection cycle."
He also said there would be a disciplinary process, with sanctions ranging from warnings to withdrawal of agency by GISC's insurer members. "You're not going to see a bland document."
He added that he hoped the board would support his personal view that the names of transgressors should be made public.
Woodburn, who comes from a tough regulatory background, concentrated more on what GISC would not be able to do, as opposed to what it would do.
Referring to potential problems with the Office of Fair Trading, he said: "There have been very serious limitations on our powers. There can be no artificially high barriers to entry; no artificially high capital-adequacy requirements; and no artificially high educational requirements."
Instead, Woodburn said GISC's approach would be "to draw people into compliance". With a "very liberal admissions policy", there would be over 30,000 firms to regulate - "many of which will never have been regulated before". Solicitors, travel agents and central heating salesmen with guarantees would all be included within the GISC's scope.
Angela Darling, head of policy at GISC, added: "It'll take a little bit of time to get everyone up to the right standards - it can't be done just at the flick of a switch."
Her remarks were seized upon by Andrew Paddick, director-general of the Institute of Insurance Brokers, who said: "This must mean that it is premature of GISC to say that it will be operating to IBRC standards from day one. It will take a long time to get there - so how can GISC say it is a symbol the public can rely on right from the start? That will take the GISC years."
Woodburn also revealed that claims handling, competency requirements and customer redress were issues that the GISC had left for consideration to a later stage."
