The British Insurance Brokers’ Association (BIBA) has issued its 2024 manifesto dealing with wide-ranging issues affecting brokers in the UK and calls on the UK Financial Conduct Authority to create and oversee a regulatory environment that encourages growth and competitiveness.
An international survey of the direct cost of regulation across jurisdictions found that, as a percentage of insurance intermediation fees and commission, the cost of regulation in the UK is 45%, the highest in Europe and only exceeded by Singapore at 59%. In Germany and France, for instance, the figure is 2%. These costs do not include the cost of any professional insurance that the insurance broker firms may be required to have. Statistics also reveal a declining number of insurance intermediaries since 2006-7 indicating, according to BIBA, that insurance broker regulation has become a disproportionate burden.
BIBA recognises that regulatory reporting by insurance brokers is an important tool for effective supervision by the FCA. However it has a resource and cost impact on firms whose senior employees dedicate many hours to this task and often incur external fees for accountants and compliance experts to verify information for both regularly scheduled reports and ad hoc requests. BIBA has requested the FCA to accelerate its work to move to a more streamlined approach to data collection.
BIBA also says that it is important that new authorisations and changes of regulatory permissions are given in a timely fashion and within the FCA’s own targets.
Seeing the South African regulatory framework often follows that in the UK, these issues are worth considering locally. The Manifesto is worth reading because many of the issues raised are issues for brokers and the insurance industry in South Africa. The link is here.