IFAs that transact only a small amount of general insurance business could benefit from reduced memb...
IFAs that transact only a small amount of general insurance business could benefit from reduced membership fees to the General Insurance Standards Council (GISC), if recent discussions with the AIFA come to fruition, writes Kirstie Redford.
Paul Smee, director general of AIFA, has been in talks with the GISC regarding membership fees for IFAs that do most of their business outside the general insurance arena. Stating that the new body would only duplicate regulation for such IFAs, he said membership fees could be expected to fall below £100 ' half the current fee.
'I think the GISC is coming to realise that IFAs are already heavily regulated because of their financial services business and I have persuaded them that they do not need to duplicate that. I also think they are going to be giving class waivers to IFAs in respect of certain major items within their rulebook,' he said.
Smee added that he expected the GISC to drop compulsory membership for IFAs whose sole general insurance business is waiver of premium. 'I think the GISC will announce that it will not regulate this activity at all, so that those people whose only general insurance business is selling waiver of premium contracts attached to pensions will not have to go near GISC,' he added.
Catherine Nicoll, head of communications at the GISC, confirmed that talks with Smee would continue until a satisfactory outcome could be agreed, blaming legal small print for decision-making delays.
'This is a very complicated area and the AIFA and the GISC feel it would be in everyone's best interest if the FSA could take over, leaving customers with a one-stop shop. But there appears to be some over-riding legal difficulty that is so far preventing this. We have also discussed the issue of reducing fees for some IFAs,' said Nicoll.
