An open letter to Gordon Brown, Chancellor of the Exchequer, from Nicholas Brooke, president of the Royal Institution of Chartered Surveyors I am writing to express my deep concern at the likely impact of the UK's approach to implementing one aspect of the Insurance Mediation Directive.
As president of RICS, a leading authority on matters relating to land and property, I am concerned about impact the Financial Services Authority's approach will have on our members and more importantly on consumers and business users of their services.
In our view the way this directive is being implemented is one of the worst examples we have ever seen of a sledgehammer being used to crack a nut. A great amount of regulation which will be both costly and cumbersome to implement is being applied to tackle what appears to us to be a largely non-existent problem.
We do not believe there is a significant problem in the UK relating to the operation of insurance in the property and construction spheres nor do we feel that the directive necessitates the kind of 'platinum plating' that the UK government seems determined to give it.
We do not understand why the government has decided to go far beyond what was strictly needed and apply this directive in ways that other countries do not feel appropriate. The result is likely to be a withdrawal of smaller firms from areas like property management, something which is presumably not the government's objective.
I am also certain that consumers and small landlords will consider it detrimental to face increased costs to stay with their current small, local property agent or to move to a larger firm prepared to bear the costs of additional government regulation. Equally, it will cause wholly unnecessary work for many people in the construction sphere given that insurance is an integral part of contracts and processes throughout the sector.
I would be grateful for your comments and assistance in resolving this matter. I think it would be unfortunate if we fail to consider all aspects of consumer and public benefit and detriment in this area without taking account of the current real position and applying the government's policy on impact assessment and consideration of small businesses. Even at this late stage RICS urges you to withdraw the provisions of the new regulatory regime as they relate to property and construction and consult about a more practical way forward.
We would welcome a meeting to discuss our concerns in greater detail.
Royal Institution of Chartered Surveyors