13 Aug 2020 | 08.54 am
Brokers ‘Choked’ By Over-Regulation
Intermediaries bemoan red tape abundance
13 Aug 2020 | 08.54 am
Brokers Ireland has called for a ‘pause’ in the introduction of new corporate regulations, saying that over-regulation is choking SMEs in the financial sector.
Ahead of its agm this week, the financial intermediaries organisation said that a pause is essential “to allow the extensive raft of new regulation introduced in recent years to bed down, and for the impact analysis promised in the Programme for Government to be undertaken, before any further changes are contemplated”.
It added that serious consideration must be given to reduced, less costly regulation for intermediaries with a turnover of less than €1m.
Chief executive Diarmuid Kelly (pictured) said: “While solid, proportionate regulation is important in the conduct of business, over-regulation and the cost of compliance with it is not only tying up SMEs in an administrative quagmire, it is increasing costs for consumers, as such costs are passed on to consumers by insurers and product providers.
“Quite aside from the cost impact for consumers, it is often the case now that consumers are bombarded with documentation regarding their insurance and financial services products, which is intended to inform but can end up obscuring what is important.
“Few young people have the will or resources themselves to set up in business when so much time and money must now be devoted to complying with regulation,” he added.
Too many changes, and too fast, are adding to the regulatory burden, Kelly stressed. He pointed out that from September 1 the Consumer Insurance Contracts Act 2019 will be implemented, significantly altering how insurance is sold.
“The review by the Central Bank of the Consumer Protection Code 2012, which governs the conduct of brokers, is also due. At EU level a review of the Regulation on Key Information Documents for packaged retail and insurance-based investment products is ongoing.
“Reviews are due to take place of the IDD, MiFID II and the GDPR, despite the recent implementation of all of these. It is difficult to see what the benefit is of such frequent changes to the regulatory environment, for consumers or for business operators.”