The amount of mortgage advisers transacting general insurance business is not expected to increase, following the announcement that membership to the General Insurance Standards Council (GISC) will no longer be compulsory.
The regulator’s Rule F42 ‘ which states GISC members are only able to transact business with fellow members ‘ was found to be in breach of the Competition Act. The only way that membership will be made compulsory is if the GISC is made exempt from the Competition Act. Meanwhile, mortgage brokers who are not members will be free to transact general insurance business.
Catherine Nicoll, communication manager of the GISC, said: ‘We will be continuing as a voluntary body.’
Despite the ruling, Mark Charlesworth, managing director of The Mortgage Operation, said he doubted more mortgage brokers would become involved in general insurance business.
‘The whole issue of the GISC has only been around for a year or so and before that, mortgage brokers were not heavily involved with general insurance business. I do not believe there will be a sudden influx now that membership is not compulsory. I also see no value for mortgage brokers doing only a small amount of general insurance business to join up,’ he said.
Nicoll said a number of advisers have already resigned as members. ‘If you do not make much money from general insurance business, it may not be worth joining the GISC,’ she said.