Speaking at the conference entitled “Insurance intermediaries: risk management and adequacy of resources”, Galbraith asked who the FSA is trying to protect and from what?
He challenged why the regulator takes such an intense interest in the area of adequate resources and why any regulation is needed.
He said that general insurance brokers present the lowest risk and that engagement by the regulator in aspects beyond the principles and minimum financial requirements is unnecessary, time consuming and expensive.
Galbraith said that brokers present no systemic risk and that the potential failure of an intermediary does not present a need for high level regulation of this area with risk transfer, client money protection, professional indemnity insurance, intense competition and the FSCS already in place.
He also called on the regulator to give more clarity to smaller firms regarding ‘what good looks like’ so that brokers, particularly smaller firms, have a clearer understanding of what a suitable assessment might comprise of.