To the uninitiated, the recent controversy surrounding the Chartered Insurance Institute (the CII) and the Personal Finance Society (the PFS) may appear to have come from nowhere. But to those in the know, the storm characterised by headlines telling of resignations, public rebuttals and rescinded invitations is one which has been brewing for some time now.
To understand the roots of where the trouble began requires an understanding of the shared history of the associations, noted CII veteran Branko Bjelobaba (pictured). It was just under 20 years ago that the PFS merged with the CII, he said, and it’s worth noting that when the two professional bodies came together, they remained separate legal entities.
In the intervening years, a series of decisions were made by the CII that a lot of members didn’t agree with, he said, notably including the decision to sell the Aldermanbury Head Office to The City of London Corporation.
“That building was essentially gifted to the CII from members and insurers in the 30s,” he said. “The land was ours and had been there since Roman times. It was one of the very few buildings that wasn’t destroyed in the Blitz of the Second World War. It withstood that which was merciless in the City… To many it felt like selling the family silver and so, a lot of people don’t like that.”
Another unpopular decision was the move to essentially subsume the legal entity of the PFS into the CII. It is a decision that has come under increased scrutiny in recent weeks, he said, as the CII’s income took an understandable hit during COVID when people couldn’t sit and write examinations or undergo physical training – while the PFS’s income stood resolute.
“So, [in 2021] there was a challenge but that was really just dismissed out of hand,” he said. “And then again in 2022, I and the last VP of Local Institutes (Grant Scott) proposed a motion to review everything that happened over the last few years, including the Aldermanbury decision and where the finances really did stand.”
For the motion to succeed required a two-thirds majority, Bjelobaba said, and it carried forward in two ways – first, determining whether the motion should be heard and second, whether it should be enacted. Particularly in light of all that has happened since, frustratingly, most people didn’t actually know what the motion was suggesting and so didn’t pick up on what was being debated.
“It wasn’t semantics,” he said. “We wanted to air what was going on. I was calling for a review but it fell at the first hurdle as there weren’t enough people voting just to hear the motion.”
In the intervening weeks, the CII announced that it would “equalise” the board at PFS, which ensures there are more CII appointees on the board than PFS appointees, he explained. Since then, relations between the professional bodies have soured at every turn with a statement from the member directors and co-opted advisers of the PFS board expressing their “severe disappointment” with the decision. Only hours later, Caroline Stuart, president of the PFS, tendered her resignation.
Last week, the Insurance Institute of Shropshire and Mid Wales (IISMW) distanced itself from the ongoing feud, rescinding its invitation to the CII chair to attend its annual dinner. Bjelobaba noted that in his 30-plus years involved with his own local institute – a tenure that includes stints as a board and council member of the CII and significant time serving as vice president between 2008 and 2014 – he has never known anything quite like the levels of antipathy reached.
As a staunch defender and proponent of the need for professionalism in insurance, Bjelobaba is less concerned with the impact that the spiralling dispute may have on consumers who are unlikely to tune into the melee than he is with the effect it is having within the sector itself. It’s a schism, he said, which has the potential to develop into a wider divide unless the right actions are taken to mitigate the damage done.
“The CII depends a lot on volunteers,” he said. “I know as I am a volunteer who served in the vice presidency role for six years and locally for 30+ years. You have a lot of loyal people willing and happy to devote their time to something that they love. It’s like the National Trust in that respect, people are happy to run things but at the same time they can get incredibly [annoyed] with the way even very simple things are handled.”
It’s critical that the CII understands the view of PFS members, he said, given the time and effort they put into volunteering and supporting the professional body. These volunteers give up their time and expertise because they love the profession, and they want to give something back – but in return, they are rightfully demanding transparency and leadership.
From Bjelobaba’s perspective, the way out of this storm is clear, if not easy.
“We need to understand what the financials are really like, in an honest and transparent way with no hiding behind things,” he said. “And we could have done that last October when I proposed my motion. So, yes, we need to understand the finances and we need to understand why these decisions are being made and why these things are being signed off at the CII board.
“So, why do those individuals feel that this blunderbuss approach is appropriate? Why are we p*ssing off fellow colleagues so much, that they’re even thinking of breaking away and going to a competitor? And to the outer world, the regulator and everyone else, this a bit like Prince Harry’s book – it’s an attempt to wash dirty linen in public.”
A fair and transparent inquiry that brings in independent people to analyse the current financial situation of both bodies and the CII’s allegations of the PFS’s financial misconduct is the way to go, he said. And it will cost money, but it will also provide clarity and assurance to members – and the opportunity for the sector to get back to what it should be doing, focusing on the bigger picture, the consumers they serve and the societal value of trusted, qualified insurance providers.
“We need the opportunity to look back at some of the decisions that have been made and that needs to be member-led,” he said. “People might ask why you’re looking at the past but sometimes the past helps to inform the future. And this is not ancient history, this is the last four or five years – some of these decisions have been made only in the last year to 18 months.
“We need a warts-and-all expose… because when I think about what members want, I know they just want a professional body that they’re proud of. And if you’re required to be transparent and honest and uphold probity and integrity, well surely you can expect your professional body to be the same.”
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