"Everyone is looking to the [insurance] industry to deliver on these new [leasehold] rules"

The Leasehold and Freehold Reform Bill has been introduced to Parliament, and Chartered Insurance Institute veteran Branko Bjelobaba (pictured) believes everyone – the government, leaseholders, and the Financial Conduct Authority (FCA) – is looking to the insurance industry to deliver on the reforms.

Under the Bill, “opaque and excessive” buildings insurance commissions for freeholders and managing agents will be banned. Such commissions will be replaced with “transparent and fair” handling fees.

Commenting on the development, Bjelobaba said in a statement sent to Insurance Business: “I think everyone (FCA, government, leaseholders, etc.) is looking to the industry to deliver on these new rules which have only come in as the industry was unwilling to play fair when it came to insuring five million leasehold properties and individuals [as] both (some) insurers and brokers have stitched up leaseholders for years.

“I have been advocating enforcement action against such individuals as clearly leaseholders have been paying for this excess for years, which a number of Parliamentarians have dubbed what has been going on as a scandal, outrageous, and corrupt.

“I fear, however, that some will want to circumvent these rules so as to maintain their excessive and unfair income, and they really should think again as this would indeed remain a corrupt and outrageous scandal.”

In his statement, a version of which was published on LinkedIn, Bjelobaba said “robust thought” now has to be given to the adequacy of commissions. He also expressed optimism that the goal of decreasing premiums for leaseholders will be realised.

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