The British Insurance Brokers' Association (BIBA) has implored the Treasury to apply an "appropriate, proportionate and cost-effective approach" to regulating insurance brokers.
It also warned that it had some "serious concerns" with the proposed approach and that a one-size fits all plan would be a dangerous step for intermediaries.
The Association made the call in a submission to the Treasury's consultation paper, A new approach to regulation: building a stronger system, where it reiterated support for a single regulatory body for the insurance intermediary sector.
Eric Galbraith, chief executive of BIBA explained that although the body supported the principle of proportionate, appropriate and cost-effective regulation, it had "some serious concerns regarding the proposed supervisory approach as set out in chapter 4 of the paper, which looks very similar to what we have now".
"Our recently published research highlights the limited risks that insurance brokers pose and we are actively calling on the government and regulator to ensure that the approach being developed for insurance brokers is more appropriate than it has been in the recent past."
It also emphasised the disproportionate and unacceptable difference between European and British regulation fees and the small overall risk produced by intermediaries.
Steve White, head of compliance & training at BIBA, continued: "The direct and indirect cost of regulation for UK insurance brokers is way out of line with the rest of Europe.
"That cannot be right and it is not acceptable. We understand and accept that the banking crisis has increased pressure on regulators and supervisors around the world and that there is now political interest in the effectiveness of rules and supervision.
"However, it is vitally important that our new regulatory regime is better at aligning supervisory scrutiny with risk, otherwise the danger is that a ‘one size fits all' approach will be adopted, resulting in inappropriate cross-sectoral approaches.
"This would inevitably be to the detriment of the low risk insurance broking sector, and that would not be acceptable for UK businesses," he added.
