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What's on the mind of the insurance minister?

What's on the mind of the insurance minister? | Insurance Business UK

What's on the mind of the insurance minister?

I can’t do justice in this article to the plethora of issues discussed with John Glen MP during the Insurance Minister interview at the BIBA Conference 2021. I thoroughly recommend registered attendees watch it back on the platform but it was heartening to hear the high regard the Minister held for insurance brokers and how he felt brokers could help with the economic recovery. It was well-received that he mentioned the BIBA Property Committee’s work on BI, the excellent work brokers do on access to insurance and on financial inclusion.

The Q&A was my chance to get to the heart of some of the very biggest issues, and, in a nutshell, here are my takeaways:

Weight of regulation – There was recognition of this issue as the Minister commented on how in the last four or five months, he had never seen so many calls for evidence go past his desk. It was good to get his update on the Future Regulatory Framework Review - with a further consultation to come - and how, in future, regulation setting will be accountable to Parliament. I was particularly pleased when he indicated how he is aiming for financial services regulation to be better tailored to the needs of the UK economy. It’s exactly what we want after being shoehorned into a banking regulatory system for so long.

FSCS - I am delighted the Minister has recognised our argument on the need for reform of the scheme with the FCA, we agree with him that there does need to be more thoughtful work done on this. After all, a model that proposed a 900% increase in fees due to the misdemeanours of an entirely different profession is unjust. The big news for members shortly after the interview, of course, was that the FSCS has just announced it is practically halving the proposed increase in the levy for GI intermediaries - reducing it from £146.8 million to £73.8 million, very welcome news, but of course, we still want the model changed longer term.

Data flow- The EU-UK data flow agreement is due to expire at the end of June and I am hopeful that the Minister can land an agreement and that his comment: “I wouldn’t expect there to be any problems,” turns out to be the case.

EU access - Obviously this is a concern since we lost passporting - but we will keep pushing on access for the long term. Good to hear the Minister say that the Memorandum of Understanding on FS with the EU gives us the opportunity for structured dialogue, that he will be looking at this constructively with regard to what future arrangements make sense and could work for both sides and how do we move that forwards.

Global competition objective - I think I made a good case to the Minister and we have the support of Craig Tracey MP, the chair of the all-party group on insurance, on this too, so let’s see when the second regulatory framework review document is brought forward - he said he would think very carefully about how to get it right and will look at solutions.

Green cards - The Minister advised he was encouraged that the EU Commission is considering this issue and it is in their pending file - so watch this space!

IPT - I’m glad the Minister recognised this as a ‘bone of contention’ and acknowledged the role a differential rate could have, for example on telematics. “At the end of the day,” he said, “I am your Minister, I hear what you say but it’s a balance between raising revenue and expenditure that we look at carefully leading up to a fiscal event.”

Pandemic - It was good to recognise the constructive work achieved here between the insurance community and the government on interventions like designated settings in care homes, the TV/ film re-start scheme and trade credit insurance. When I asked him about live events and the proposals put to him by the broking sector it was pleasing to hear he was having discussions with the Chancellor. Although this is a difficult subject to quantify he will continue to examine it in an engaged fashion.

Pandemic Re – An interesting reply from the minister about where would the boundaries lie and that there is work to be done in the coming months.

High-rise residential buildings with cladding – PI - We are doing a lot of work with the Minister and MHCLG on this so I was pleased to see him say publicly that he is working closely with industry to design the scheme and it is a massive priority for them and that an outcome is ‘imminent’.

High rise residential buildings with cladding - property - It’s encouraging to hear that he recognised BIBA engagement on this issue and that his preferred outcome is a market solution. Well done to Aviva for their new facility and BIBA hopes to add to the options in the near future.

Summary

What I really take from this is that it is a signal that there is an enormous amount of constructive work that BIBA can do with Her Majesty’s Treasury and that there is a willingness for numerous work-streams to be carried forward as we look to take them to the next level. We have just had a good result with the halving of the proposed FSCS levy and we very much look forward to the challenges ahead.