More ructions among UK brokers as the country’s regulator, the Financial Services Authority (FSA), moves to redefine its consumer protection procedures for insurance.

The brokers say proposed amendments to the Insurance Code of Business (ICOB) rules will no longer require direct insurers to provide retail customers with “demands and needs” statements, which are similar to Australian statements of advice.

The broker groups – the Institute of Insurance Brokers (IIB) and the British Insurance Brokers Association (BIBA) – say the amendments will give the direct insurers an unfair advantage. “The FSA’s original decision to subject direct insurers to the ICOB rules was… explained as a necessary measure which would help to provide appropriate customer consultation and avoid confusion,” BIBA Head of Compliance Steve White said. “We supported the original decision and are very disturbed by these new proposals.”

Feisty IIB Director-General Andrew Paddick was less circumspect. “There are people at the FSA who think that many classes of insurance such as motor and household are simple, which they are not,” he said. “If insurers are exempted from having to provide a properly constructed demands and needs statement, there could be a lack of written evidence to produce in the event of a claim being repudiated as not covered.”