n a letter circulated in recent weeks and months, the body claims this is the number one issue of concern to its members.
“The vast majority are non-cash handling, non-product producing, advice-based firms. In fact, the Central Bank of Ireland, in its Prism risk-rating system [Probability Risk and Impact System] categorises them as low risk.
“Yet these low-risk MSMEs [micro and small to medium-sized enterprises] are expected to comply with the same regulatory and legislative framework as large corporations such as insurance undertakings and banks, posing a level of systemic risk far greater than any intermediary,” it said.
Four-in-five insurance and financial brokers that are members of Brokers Ireland employ fewer than 10 people. In a briefing note, the body claims the shortest CBI application form is 33-pages long.
“This is not only threatening the viability of many of these brokers, but the red tape requirements are leading to information overload for consumers and is serving to confuse rather than enlighten.
“It is also a significant barrier to entry into the intermediary sector, especially the general insurance broking sector and poses a longer-term risk to competition in that sector.”
A spokesman for CBI said a high standard of regulation was needed in order to protect consumers. “As the regulator of financial service providers, the Central Bank has to ensure that the best interests of consumers are protected.
“A high-quality and effective regulatory framework is essential to ensure firms operate to high standards. We adopt a robust, structured, risk-based and proportionate approach to our supervision and engagement with firms.
“The Central Bank has and continues to engage with the sector on our approach.
“We continue to regularly engage with Brokers Ireland, and other stakeholders to hear views and insights as it relates to our mandate.”
