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The insurance scheme that made no sense

INSURANCE MAY not be sexy, but it does arouse great passion. I have incurred the righteous anger of the Insurance Brokers Registration Council (IBRC) on several occasions.

Each incident followed a sadly predictable course. I would write an inoffensive article using the term "insurance broker" (or just plain "broker") to describe the people who survey the insurance market to find you the right policy for your car, home or whatever.

After a time lag the council would send a curt letter reminding me not to use the term "insurance broker" without thought. The IBRC has a right to do this: an "insurance broker" is a term only to be used for people and firms registered with the council. It is an exclusive mark of membership, backed by law.

But for the confused consumer this wasn't a guarantee of good service. There is no single registration and regulation scheme for those who sell insurance. Registration with the IBRC was voluntary and it cost money: firms paid up to pounds 5,000 a year. Plenty of people who sold insurance could not register with the IBRC (including big names such as Hill House Hammond and the AA) or chose not to join.

The result is that the term "insurance broker" has never become synonymous with professionalism. Meanwhile, journalists are supposed to refer to everyone who is not IBRC-registered by the magnificently cumbersome title of "insurance intermediary".

It is a ridiculous mess but suddenly there is some hope. The Government is going to repeal the Insurance Brokers (Registration) Act 1977, which gave the IBRC the power to police the list of those who wanted to call themselves insurance brokers. The plan at the moment is for an industry- wide working group to develop a much simpler and more effective way of regulating the sale of general insurance. So we should be able to visit an insurer, or broker, check that it carries an official stamp of approval, and be sure the adviser has at least passed some exams and that the firm is solvent.

If the industry does not succeed in sorting itself out then the Treasury has made noises about bringing the sale of insurance into the all-powerful embrace of the Financial Services Authority.

There is only one loser in all this. The poor old IBRC went into a huff when it heard it was to lose its powers. Although no date has been set for the repeal of the Act, the IBRC has announced it will close at the end of October.

Which only leaves me with one question: what, now, are we supposed to call those people who sell insurance?

Travel warning

THE NASTY practice of tying cheap holidays to expensive compulsory travel insurance has finally been outlawed. From November, travel agents and tour operators won't be allowed to make customers buy insurance to get a discounted package deal.

Holidaymakers thinking of taking a last-minute package this month should check what the agent or operator is offering. What is likely to happen is that commission-hungry sales agents will forget about compulsory insurance but instead put customers under pressure to buy the insurance anyway. If you fall for the patter you will be paying 50 per cent too much for the cover. It always pays to make your own arrangements.