Advisers do not stand alone when it comes to regulation and Europe. Paul Robertson talks to Steve White, your man in Brussels
He said: “It’s not absolutely clear how the decision should be scoped. The UK position is we want this to be on all new policies from 31 December.
But that’s still not absolutely certain because the Europeans need to come to a rounded decision on that.” In effect, the decision could still be retrospective on existing cover.
“The UK seems to have come to a view a little ahead of the rest of the European countries,” said White.
“We tested this at a BIPAR level as to what the other countries were doing and it was unclear where anybody else really stood on this. The Treasury is adamant that it will be their way, so we really hope they’re right on that one.”
Another issue arising out of the gender debate is community rating. An actual example raised with the European Commission that came out in the gender debate was a life proposal for two 17-year-old twins one male, one female, both living at home, both the same height, both the same weight, both students. So they look identical risks. Yet the mother recently died of breast cancer.
“Now, breast cancer is a 99% female condition,” said White.
“If you can’t rate on gender, how do you rate those two? If you start average rating them, it becomes very attractive for the female, but not so for the male. The male probably won’t buy it, but the females will pour in.
“The reinsurers are still going to want to know the split on the portfolio because it will affect the reinsurance costs. So, there is a selection issue.
“The community rating thing is pretty much alien to insurers because insurers rate by risk. Clearly, we’re keeping a very close eye on things, such as the age debate as to whether that leads into that area. We would hope not because that would pretty much destroy the risk rating that we’ve all grown up with.”
BIBA is currently working with the Treasury on the age side. There is an industry agreement going through now, which allows an exemption within the Equality Act so that insurers can continue.
Huge sea changes in markets are all well and good, but what of the adviser, what lurks around the regulatory corner for them?
the road to professionalisation It is not only IFAs looking to professionalise themselves.
BIBA’s general insurance brokers are also looking to differentiate themselves from secondary sellers, those who sell insurance on the back of another product.
As ever, there are complications when defining a correct level of attainment.
“There is a wider debate there,” said White.
“This is a debate that’s also going on at European level as part of the Insurance Mediation Directive review.
“We don’t sense from the policy writers that there a willingness to mandate a certain approach across Europe.
