The National Insurance Brokers Association (NIBA) is calling on the Federal Government to extend the start-up date for regulations requiring all brokers to hold professional indemnity (PI) cover.

In a submission to the Australian Securities and Investments Commission (ASIC), NIBA argues the new arrangements are complex and cannot be implemented in time for July 1, 2008.

Changes to the Corporations Act introduced into Parliament in June mandate PI insurance as the way financial services licensees must meet their compensation obligations.

NIBA CEO Noel Pettersen says brokers support the legislation but are concerned its scope is too broad to account for specific risks in insurance broking.

He says brokers have a relatively lower risk profile for claims than intermediaries in other financial sectors, and this should be factored into the legislation.

"The market for PI insurance depends heavily on the nature of the risks to be covered," he said. "The more difficult it is to define and analyse the risks involved, the more difficult it is to underwrite the PI insurance.

"The type of coverage available to insurance brokers is considerably different to what could be purchased by financial planners, stockbrokers and other licensees."

Mr Pettersen says new PI cover would not need to be written to give brokers sufficient protection.

"NIBA is keen to work with ASIC further in developing PI insurance arrangements for insurance brokers that are commercially attractive while providing a reasonable level of protection for clients," he said.

"Such a process will also take considerable time. NIBA has pointed out to ASIC that the process could not possible be completed by the suggested start date of 1 July 2008."