The Financial Services Authority has previously voiced concerns with the lack of transparency regarding brokers' commission and invited the insurance industry to prepare guidance on commission disclosure and the management of the potential conflicts of interest.
The British Insurance Brokers Association (BIBA) and the London and International Insurance Brokers' Association (LIIBA) prepared the guidelines which recently received "Industry Guidance" status from the FSA, who have shown a preference for industry led solutions.
The "Industry Guidance" classification is used by the FSA because they believe that "some firms may feel more comfortable following guidance which they know the FSA has reviewed and confirmed". The decision was welcomed by the BIBA, the LIIBA, the Institute of Insurance Brokers (IIB), the Association of British Insurers (ABI) and risk management association AIRMIC.
An FSA assessment will take place in 2010/2011 to determine whether the guidelines produced have been successful in achieving their goal of improving transparency within the commercial insurance market as regards commission disclosure and conflicts of interest.
The Industry Guidance can be accessed from the BIBA website here.