HISTORIC PRESS RELEASE : Treasury cuts red tape for Insurance Brokers [April 2001]
The press release issued by HM Treasury on 30 April 2001.
The Treasury today confirmed the dissolution of the Insurance Brokers Registration Council (IBRC), the body previously responsible for insurance brokers’ professional standards.
Instead the industry will be regulated by the General Insurance Standards Council (GISC). The GISC, unlike the IBRC, is open to all insurance intermediaries and will set its own standards of business practices.
The move forms part of the planned overhaul of financial services regulation by the Treasury.
Economic Secretary to the Treasury, Melanie Johnson said:
“The new regulatory arrangements represent a major step forward for the general insurance broking industry. Brokers of general insurance will now be able to operate free of the red tape they were previously burdened with.
I welcome the establishment of the General Insurance Standards Council and the move by the industry to set its own standards. I am also grateful for the work of the IBRC in ensuring an orderly run down of its operations.”
NOTES FOR EDITORS
The change relates to general insurance only, e.g. home and travel insurance and not long-term investment-based insurance, e.g. life assurance.
The IBRC was set up under the Insurance Brokers (Registration) Act 1977(IBRA). IBRC regulated the use of the title ?insurance broker? and maintained professional standards among those intermediaries that used it.
But this was seen as incompatible with the Government’s move towards a single financial services regulator. There were also a number of flaws such as the fact that the IBRC captured only those who chose to trade as insurance brokers, but not the many other general insurance intermediaries.
In early 1998, the Treasury consulted on the future of the IBRC. Most of those responding said that voluntary regulation offered the best prospects for improving standards of conduct among general insurance intermediaries.
The then Economic Secretary, Helen Liddell, announced (in July 1998) the repeal of the Insurance Brokers (Registration) Act 1977, and consequent abolition of the IBRC.
The industry has now set up the General Insurance Standards Council (GISC) a voluntary body to carry on many of the IBRC’s tasks.
The Financial Services and Markets Act 2000 (FSMA) repealed the IBRA and the IBRC’s dissolution was put into effect under two Statutory Instruments – SI/2001/1283 (the main Dissolution Order) and SI/2001/1282 (a Commencement Order). The IBRC ceases to exist today.
The Treasury is to take over the assets and liabilities of the IBRC.
As a result of this change, insurance brokers will no longer be exempt from the Estate Agency Act 1979 which regulates the activities of estate agents in the buying and selling of property.
