| Journal: TWUK | Section: |
| Title: | Issue Date: 17/07/00 |
| Author: | Page Number: 49 |
| Copyright: Other |
INSURANCE
Target: the council is aiming to improve the way that all different kinds of insurance, from travel to household, is sold to the publicSince its launch this month, the General Insurance Standards Council has yet to make an impression on the trade.
THE General Insurance Standards Council is being shunned by the travel insurance industry, with only a few companies signing up as members.The GISC, which launched on July 3, was set up by the insurance industry to improve, through self-regulation, the way insurance is sold to the public. This would avoid having regulation imposed by the Government.
However, while brokers and intermediaries support the aims of the GISC, many will not join immediately because they are unhappy with the way the organisation has been set up so quickly.
The lead-up to the launch has been littered with problems. In March it had to admit that it would have to start life as a voluntary body, rather than having mandatory powers to force all in the insurance industry to join, to avoid falling foul of competition laws.
Then within two weeks of publishing the rule book at the beginning of last month, the GISC said it would be making revisions as there were elements that the insurers were unhappy about.
Hamilton Barr sales director Michael Pettifer said:”We can’t join when we don’t know what we are joining because they keep changing the rule book.”
Voyager director Jonathan Buttery said it is being pushed too quickly.
“I think GISC is trying to rush things through as it doesn’t want regulation to be imposed from the Government. My fear is that the industry will be seen as incapable of even setting up the body to oversee self regulation.”
Pettifer and Buttery confirmed they will join when certain issues have been ironed out.
These include changes to the solvency requirements which Pettifer described as “too stringent”.
“By joining, we will show we are regulated by the GISC and that will mean something as the GISC is going to promote itself to the public,” said Pettifer. “But it will take longer than everyone thinks to get itself known. I believe it will be three years.”
Preferential managing director Steve Nickerson said his company will show the GISC logo on its literature as it should become a standard for people to recognise.
“It is important to join and meet its requirements to avoid regulation being imposed on us but we were not in the first wave to join,” he added.
Ketteridge general sales manager Doug Weston believes intermediaries will have to join, even if it is a voluntary body, as the big insurers will only want to work with companies that are signed up to the GISC.
Citybond sales director Iain Chalmers agreed. “GISC will become mandatory and I think it is a good thing if that is the way to make everyone responsible for what they are selling, and to make sure agents are selling insurance properly,” he said.
Under the current rules, there is an opt out for retailers to sign an appointed agent agreement with GISC members so they do not have to join, but do agree to abide by its rules.
Few intermediaries are keen on this idea as they would be held responsible if the agent then broke the rules. ABTA is also not keen as it wants to act as regulator on behalf of its members (see page 52).
Members of the British Insurance Brokers’ Association or the Insurance Brokers Registration Council, including Devitts and Perry Gamble, will only become members once those bodies are dissolved under a parliamentary act, to be replaced by the GISC.
Only a few companies including Euclidian, Primary and ABC Travel Extras were keen to join in the first wave. Euclidian Risk Management director Steve King said: “Euclidian is heavily regulated anyway, so another raft of regulation is not a problem.”