The debate around increased transparency on insurance broker commission disclosure, proposed in the Insurance Mediation Directive II draft, is just a storm in a teacup, industry experts have said.
Regulation expert Branko Bjelobaba, founder of insurance compliance consultancy Branko, said while the Directive looked at commission disclosure, the UK regulator was "happy" with the current system and change was not imminent.
He said: "Brokers do not currently disclose commission, it is not part and parcel of how they do things. I think more will come out of of the Directive on that but it is a long way off.
"Before then we have a new regulator (FCA) coming in that will shake regulation up a bit but there is nothing to suggest this issue is on its agenda at all."
Debbie Kleiner-Gaines, managing director at Best Health UK, said brokers did not disclose commission as a general rule in client demands and needs statements, but regulation to stipulate otherwise would not be a significant change.
She said: "If you had to disclose commission advisers would have to be careful how it was explained to clients. But if the client was happy with the overall service and the plans that had been outlined then I cannot see it would be a problem. I do not think it would make much difference."
Mick James, business development manager at reinsurer RGA UK, said he would rather see as little change as possible coming out of Europe as the Directive had a tendency to make an appropriate existing system more complicated.
He said: "I think the mediation directive will be a significant marker of how the insurance industry deals with product bundling. But from the consumers point of view it might make it more complicated because it is ok as it is and no change for the UK industry would be a great result."
Roger Edwards, managing director of Bright Grey, said increased commission disclosure would not necessarily have any significant impact on the industry.
The Directive proposals state clients must be informed of: "If the intermediary will receive a fee or a commission of any kind, the full amount of the remuneration concerning the insurance products being offered or considered or, where the precise amount is not capable of being given, the basis of calculation of all the fee or commission or the combination of both."
And advisers will also need to make clients aware of: "If the amount of the commission is based on the achievement of agreed targets or thresholds relating to the business placed by the intermediary with an insurer, the targets or thresholds as well as the amounts payable on the achievement of them."
