The truth about disclosure

Eric Galbraith

The German statesman, Konrad Adenauer, once said: "We all live under the same sky but we don't all have the same horizon." Having heard conflicting positions on commission disclosure and transparency wrongly attributed to my organisation by some of its own members recently, I am inclined to agree with Adenauer.

On the one hand, a number of members are convinced that the British Insurance Brokers' Association is promoting mandatory disclosure, while on the other, certain members are convinced that we are completely against transparency. These are two views at different ends of the spectrum and both are far from the truth.

We believe that greater transparency in all matters, though specifically for commercial customers on commission, can be achieved by the market; we do not need further regulatory intervention.

BIBA has committed significant time and resources to provide guidance to its members to identify and manage conflicts, increase transparency and assist with disclosure processes. Our current work is on an industry solution that provides greater transparency for commercial customers in respect of: the status of the intermediary; the services that they provide; how these services are paid for; and remuneration disclosure upon request for commercial customers.

The Financial Services Authority has made it clear that the status quo is not sustainable and that greater transparency is necessary. For those members that believe BIBA is supporting mandatory disclosure, a market solution provides the industry with a way forward that, although it may be seen by some as more than required, responds to the FSA's discussion paper without the need for mandatory disclosure. For those members that prefer mandatory disclosure, the market solution route will not seem far enough but it takes us to a solution that is in the hands of the industry and not the FSA.

- Eric Galbraith, chief executive, BIBA.

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