Last week, following a disagreement over the mandatory disclosure of brokers' commission, the London Market Insurance Brokers' Committee (LMBC) took the decision to break away from the British Insurance Brokers' Association (BIBA) to form a rival trade association.
Jonathan Palmer-Brown, the chairman of LMBC, explained that this split from LMBC's parent organisation was a unanimous decision taken by the board. He also revealed that a new organisation is to be incorporated, which will be called the London International Insurance and Reinsurance Brokers' Association (LIIBA). LIIBA should be active by 1 January 2009.
The catalyst behind the split is BIBA's continuing stance against the FSA's attempt to introduce the mandatory disclosure of commission received by brokers. LMBC members have expressed their disagreement with this position throughout the past year.
Despite this split, the LMBC has stated that it will continue to work and co-operate with BIBA on an ad-hoc basis. The chief executive of BIBA, Eric Galbraith, has responded by affirming BIBA's stance on the commission issue, stating that "we believe that the current rules and principles are sufficient", as well as agreeing that BIBA and LMBC will continue to work together towards a market solution in relation to the FSA's proposals.