The British Insurance Brokers Association (BIBA) has called on the UK Treasury to ensure the future regulation of insurance brokers is “appropriate, proportionate and cost-effective”.

In its response to a Treasury consultation paper on a new approach to financial services regulation, BIBA welcomes the proposal for a single regulatory body overseeing brokers, but expresses “serious concerns” regarding the proposed supervisory approach, which it describes as “very similar to what we have now”.

New research launched by BIBA shows that regulatory costs for brokers in the UK are three times higher than the next most expensive EU state, Ireland.

It describes the regulatory burden currently imposed by the Financial Services Authority on brokers as “a greater competitive disadvantage” than the amount of corporation tax they pay.

“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,” BIBA CEO Eric Galbraith said.

From the end of 2012, UK brokers will be regulated by a new body, the Financial Conduct Authority (FCA).

“We have succeeded in persuading the policy-makers that the insurance sector is not banking,” Mr Galbraith said. “Now we need to get them to understand that general insurance brokers and intermediaries are not insurers.

“We are not risk takers, we are risk advisers.”

The Chartered Insurance Institute (CII) has also weighed into the debate, saying the new proposals may lead to “inefficient regulation” with too much supervision directed at low risk firms.

It says commitment to qualifications, continuing professional development and ethical conduct should be considered when assessing an organisation’s risk profile.

The CII has also expressed concerns about appropriate consideration being given to the “very different risks posed by insurance relative to banking”.