The FCA has today published terms of reference for a market study into the Wholesale insurance broker market. It is proposed that the market study will focus on how effectively competition in the market is working, in particular:
- whether brokers are competing for customers by offering good deals, and how easy it is for new entrants to join the industry;
- how conflicts of interest are managed and affect competition and client outcomes, for example whether brokers are determining placement of business by reference to facilities or insurers that provide them with higher commission or revenue; and
- how broker conduct impacts on competition in the sector, including whether some broker activities may exclude certain types of insurers, and in particular smaller firms.
The FCA is asking for views on the topics the market study plans to explore to be submitted by 19 January 2018, and will aim to publish an interim report next autumn.