§ Mr. Cashasked the Secretary of State for Trade and Industry if he will make it his policy to embody the competition principles laid down in the Fair Trading Act 1973 in any measures to be brought in under the Financial Services Act 1986 governing independent insurance intermediaries, including the self-employed and independent brokers and other small businesses, with particular reference to (a) the cost of joining a self-regulatory 276W organisation (b) the commission charged on policies and (c) the restrictions imposed upon the business they may transact; and if he will make a statement.
§ Mr. HowardThe Financial Services Act requires that my right hon. Friend may not transfer powers to a designated agency unless he is satisfied that its proposed rules do not have, and are not intended or likely to have to any significant extent, the effect of restricting, distorting or preventing competition to an extent greater than is necessary for the protection of investors. This will apply to rules and practices affecting independent insurance intermediaries as it does to other forms of investment business, and will extend to rules specifying the fees authorised businesses must pay and restrictions on the business they may transact. The Act does not permit rules made under it to impose limits on the commission which may be paid in connection with investment business; but any commission agreement embodied or referred to in the rules of a recognised self-regulatory organisation would also be subject to the competition test.