A senior insurance figure has called for a complete ban on banks selling general insurance products.
Eric Galbraith is chief executive of the British Insurance Broker's Association. He spoke out in response to the Financial Services Authority beginning a consultation into the mis-selling of insurance by salesmen chasing incentive payments. The FSA says initial evidence shows that insurers, investment firms and banks often failed to even consider the inherent conflict of interests and the risk of customers getting unsuitable advice.
Although BIBA members obviously have a commercial interest in seeing off rival sellers, Galbraith insisted banks bore the most blame for the scandal and needed to pay the price. He told Insurance Age that "Our sector has been tarnished by the practices of other institutions whose main business is not insurance and have mis-sold insurance products."
Galbraith said he wasn't arguing that insurance brokers shouldn't be held to high standards, but that the industry could only work well if it was restricted to specialist experts. While a ban might seem extreme, Insurance Age notes than Canada already prevents banks from selling insurance.