BIBA CRITICISES FSA CONSULTATION PAPER

The British Insurance Brokers’ Association (BIBA) has said that the Financial Services Authority’s proposed treatment of fee disclosure to consumers represented “a licence for the unscrupulous to hide charges”. BIBA was responding formally to the FSA’s consultation paper 07/11 which suggested different approaches for ‘protection’ products and more general insurance products. However, BIBA head of compliance and training Steve White said that the removal of the need to separate the fee component from the premium in certain lower-risk products was “an extraordinary proposal, particularly given the FSA’s scrutiny of commission disclosure in the commercial market at the moment”. BIBA said that it was in full support of the FSA’s move to a more principles-based regime, “because of the freedom and flexibility that such a regime will allow firms in their day-to-day business”. However, it expressed concern at the proposed classification of private medical insurance as a low-risk product. BIBA chief executive Eric Galbraith said that the Association found it “contradictory and alarming” that the FSA was proposing “changes to its Insurance Conduct of Business rules that will inevitably lead to greater uncertainty and ultimately detriment”.