Q&A: Paul Anscombe on the new Insurance Brokers’ Standards Council

Q. What are the key aims and goals of the new Insurance Brokers’ Standards Council?

A. The main aim of Insurance Brokers’ Standards Council is to raise the standards of professional insurance brokers by means of an agreed code of conduct for the protection of our clients. We felt very strongly that there appears to be a growing number of poor practices in the profession and that ultimately it’s down to individual insurance brokers to set the standards we abide by.

Biba represents corporate bodies rather than individual insurance brokers and the Chartered Insurance Institute provides services for the whole insurance industry, but we wanted a specific code of conduct created by insurance brokers for insurance brokers.  

Q. You say incidences of poor practices are on the rise, where are brokers falling short?

A. There are a number of poor practices that stand out, but one example is how and when brokers use unrated insurers. We’ve seen a number of insurers collapse over recent years so what’s the professional thing to do if you are in a position where you might consider dealing with an unrated insurer? We also see a number of situations where brokers are using managing general agents (MGAs) but not necessarily adequately clarifying the carrier providing security behind the MGA.

Another area is add-ons, which the FCA has put under the spotlight. There are numerous other issues that frequently cause confusion with clients and/or disputes among brokers such as long-term agreements and what the right protocols should be when business transfers from one broker to another. In our view it is vital that practising professional insurance brokers reach a commonsense approach on the issues which that affect our market.

Q. There are several UK professional/trade bodies that already represent the broking community, and some brokers have been very vocal that another broking body is not needed …

A. We’ve made it clear from the outset that we don’t want to create another voice in the market around the work that Biba and the CII are doing, we couldn’t have been clearer about that.

What we’ve always said is that we are focusing purely on the codes of conduct and behaviour of insurance brokers as professional individuals. Biba is a trade body representing corporate members and we are a council representing individuals and professional standards so we’ve never seen it as conflicting.

Q. Other than providing a code of conduct for the broking community, how else will brokers benefit from membership with the ISBC?

A. We have spoken about insurance broking as a profession for a number of years but I don’t think it has been taken seriously enough despite the fantastic work that brokers regularly provide their clients. It is vital that we are recognised by all of our stakeholders as a true profession and the way to achieve this is through individual practitioners setting our codes of conduct with specific reference to legal and regulatory requirements.

The big move is towards transparency. When clients engage with any professional firm, they need to know exactly how that professional party is being remunerated and what they are doing within the scope of their retention. There needs to be much clearer terms of engagement for insurance brokers acting on behalf of their clients.