A Federal Government decision not to impose further regulation on stockbrokers over conflicts of interests may be good news for the insurance industry as it awaits the results of an Australian Securities and Investments Commission (ASIC) inquiry.

The Government has ignored a joint parliamentary committee on corporations and financial services recommendation to tighten the rules for stockbrokers disclosing their conflicts of interest, deciding instead to rely on a model focusing on managing conflicts.

Last November ASIC announced its investigation of the remuneration practices of insurance brokers. The investigation was spurred by the US investigation by New York Attorney-General Eliot Spitzer, which found widespread evidence of secret deals and bid-rigging in the American market.

But the National Insurance Brokers Association (NIBA) has held steady on the issue, saying US brokers operate in a very different way to Australian brokers – which are among the most stringently regulated in the world.

“ASIC told insurance brokers to have conflicts of interest policies in place by January this year,” NIBA CEO Noel Pettersen said yesterday. “ASIC basically said that if those policies weren’t up to scratch, then they would look at introducing further regulation. I think that’s what stockbrokers have also been told.”

NIBA government and regulation consultant John Hanks told Sunrise Exchange News disclosure policies will hopefully be enough to satisfy ASIC without introducing further regulation.

“I expect that brokers will be able to satisfy the regulator by disclosing conflicts, and no further regulations will apply,” he said. “However, we won’t know the outcome until ASIC releases its final report later this month.”