HC Deb 27 July 1998 vol 317 cc23-4W
Mr. Caplin

To ask the Chancellor of the Exchequer, pursuant to his answer of 7 April 1998,Official Report, columns 151–52, what are the Government's plans for the Insurance Brokers' Registration Council. [53230]

Mrs. Liddell

Following my announcement on 7 April, the Treasury has consulted the insurance industry and its customers on insurance intermediary regulation and on the future of the Insurance Brokers Registration Council (IBRC). Most responses identified weaknesses in the present arrangements for general insurance intermediaries. The existing hybrid framework, using the Insurance Brokers (Registration) Act 1977 supplemented by the Association of British Insurers' General Business Code of Practice, was regarded as incomplete and outdated.

Set up under the 1977 Act, the Insurance Brokers Registration Council regulates the use of the title 'insurance broker' and maintains professional standards among those intermediaries who use it. While there was recognition that the Council had provided a valuable service, there was a consensus that circumstances have changed in such a way as to bring its existence in its current form into question. I have therefore decided that proposed legislation to reform the financial services regulatory structure should include power to repeal the Insurance Brokers (Registration) Act 1977. Repealing the 1977 Act will end the statutory basis of the Council.

I now look to the industry itself to put the desired standards on a soundly established footing from which they will command widespread support. The industry proposals for voluntary standards, initially made in response to the recent consultation, are at an early stage. They now require detailed development. The Treasury would support further consolidation of consensus support from insurers, from insurance brokers and other intermediaries, and from commercial and personal customers. They now need to build on the IBRC' s work to generate constructive ideas for a modern flexible body to set standards for the insurance market and to meet the challenges it will face in the future.