Moves by the UK Treasury to lump insurance broker regulation under the Consumer Protection and Markets Authority (CPMA) have been slammed by insurance groups.

Following a consultation paper that ruled out a separate regulatory body for the insurance sector, the Institute of Insurance Brokers (IIB) says its members doubt that a body with such a wide remit will be able to deal with the real issues affecting the broking sector. 

IIB CEO Barbara Bradshaw says she questions whether the regulator sees insurance brokers “as a soft touch”.

“Is it just a lack of understanding of the role of the insurance broker which has led to the current heavy-handed and expensive regime?” she said.

“The cost of regulation is out of all proportion to a broker’s bottom line income. For example, on £5 million ($8.1 million) gross income, this year’s regulatory fee would be in the region of £46,000 ($75,000) – a hugely disproportionate amount.” 

British Insurance Brokers’ Association CEO Eric Galbraith also attacked the issue of costs.

“Insurance brokers pose a low risk to the objectives of the CPMA and care should be taken to ensure that the new regime leads to appropriate and proportionate regulation of our profession.

“Treasury must now take this opportunity to lay down the foundations for a regulatory environment designed for our profession.”