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In our last Regional Chair’s Advisory Board I asked what issues attendees felt were their priorities for our 2025 BIBA Manifesto. Unsurprisingly, nine out of 11 regions (not quite 8 out of 10 cats) said their number one issue was regulation.
More than ever, and with a new Government in place, now seems the time for 'parley' with the FCA.
Recently I accepted a rare opportunity to take our members’ story and our manifesto points to the heart of the FCA, speaking at its inaugural 'Insurance Learning Seminar'.
Several hundred FCA insurance officials, including from the policy, supervision, authorisations and communications teams, were there. These included all those that really matter to our sector, i.e. the people that write our rules and supervise us. In the Q&A section the questions came in thick and fast.
We need good regulation, we want to push the Government’s growth mission, we want markets to work well and customers to have positive outcomes. But so many firms feel there is often an issue with proportionality. For example, a typical broker with 50 insurer agencies and 20 products with each of these insurers would face having to manage 1,000 product value assessments. This work is a drag on growth, and my aim is to try to get a better balance under a healthy regulation framework.
Authorisation times are also long in several segments of our membership and we are keen to shorten them. If the French regulator can prioritise authorisations, then we shouldn’t see many cases in the UK taking 10 months?
Being a ‘glass half full’ kind of guy, I believe the FCA is taking these points on board. Its insurance team has joined us on our Regional Tour, and by the end of it, they will have met almost 1,000 BIBA brokers up and down the UK, hearing their regulatory issues first-hand. Neither organisation has done this before. So far, it’s providing great insights that might, for example, help view a new, theoretical piece of regulation through a new lens, picking out what would be practical and proportionate in the real world.
We have seen this work in practice. The first incarnation of the Consultation Paper on consumer credit reporting would be awarded a pretty low score on the BIBA regulation team version of rotten tomatoes! It contained proposals to potentially increase the credit broking reporting requirements from one line currently, to an Olympic sized 114, and the premium finance houses who help collect this data would only be able to assist with 17% of the proposed data collection. So, this will be a real test of the FCA taking on board feedback and ultimately moulding theoretical proposals into a more practical reality.
We now seem to have arrived at a time with a genuinely great opportunity on SICGO (the world’s worst acronym - Secondary International Competitiveness and Growth Objective) to work constructively with the FCA to ‘clear out the garage’ following the introduction of the Consumer Duty having identified at least 11 ICOBS that can and should be rescinded. For example, is ICOBS 5.1 ‘General eligibility to claims benefits under GI contracts’ needed when we now have FCA Principle 12 - the Consumer Duty, requiring firms to act to deliver good outcomes for retail customers?
We also feel our long-term aim of reducing the scope of the Consumer Duty, by removing many larger commercial risks, is likely to bear fruit – while still protecting consumers of course.
My ‘shopping list’ at the FCA seminar was pretty long, but for good reasons. My regulation colleagues have worked up a spreadsheet of ICOBS that could now be ‘retired’ or absorbed into existing high-level rules, guidance and principles.
I welcome the regulator coming to the table, enabling proper debate with an aim for better, more balanced outcomes at the end of it.
Our engagement with the FCA has been substantial this year; via our Advisory Boards, our main board, our regional tour, the BIBA Conference (they had a very busy stand) , their seminar and our regular liaison meetings. So now is the time to roll up our sleeves, get round the table, act on SICGO and push for the things we want cleared out of the regulatory garage! Here are three points to start with:
With a tidier garage, and more proportionate regulation, we can more easily 'make markets work well', and our members can better invest and grow, ultimately meeting the aims of the Government.
If you haven't been involved to date, then attend our Regional Tour, or join a BIBA Advisory Board or Committee and be part of this conversation.
