British Insurance Brokers’ Association (BIBA) CEO Eric Galbraith has called on the UK Government and the financial services regulator to stop blaming the industry for the global financial crisis.

“The insurance sector was not responsible for the financial crisis and our reputation with clients remains very positive,” he told a reception marking BIBA’s merger with the Institute of Insurance Brokers.

“We believe there needs to be far more recognition of the insurance sector and the value we bring to the UK.”

Mr Galbraith says the UK insurance industry is facing two crucial issues that need to be resolved: client money and adequate resources, both needing work from the industry and regulator to achieve better regulation.

Another area of concern to BIBA is the Financial Services Compensation Scheme (FSCS).

“The failure of credit brokers who were allowed to mis-sell payment protection insurance highlighted the fundamentally flawed structure of the current compensation scheme,” Mr Galbraith said.

“Many of our members are facing a 50-fold increase in the levy during the past three years because of a product sold by organisations whose main business was not insurance intermediation.”

He also called on insurers to take more responsibility for who sells their products.

“If insurers are prepared to have their products sold by non-professionals, they must take more responsibility for the sales process, including compensation, and the regulator must be quicker in future to both spot and take action on issues of wider implication,” Mr Galbraith said.

The role of the FSCS will be reviewed next year. BIBA has called for an end to cross-subsidies and separation for brokers whose main business isn’t insurance intermediation.