INSURANCE brokers have been challenged by the Minister of State for Commerce to say whether they are willing to do what needs to be done to restore confidence in the insurance and investment industry.
In an address to the Irish Brokers' Association annual dinner which dispensed with the usual annual dinner pleasantries, Mr Pat Rabbitte said the Taylor affair had shown that the existing regime for policing investment intermediaries had been found wanting.
"I would like you to consider, not this evening but in the cold light of day, whether you are individually and collectively willing to do what needs to be done to put in place an insurance and investment regime in which the public can place its confidence and, more importantly, one into which it is willing to entrust its hard earned cash," said Mr Rabbitte.
The Minister told the insurance brokers that the Taylor affair was not an isolated occurrence. "It was not and even if it was an unusual occurrence, the hard reality is that it only takes one rotten apple to eventually destroy the whole barrel. We must regulate accordingly, vigorously, effectively, forcefully".
Mr Rabbitte said bringing in a tighter regulatory regime for investment intermediaries would inevitably mean that strict controls would also apply to insurance intermediaries.
"It is for this very reason that I posed the question at the outset as to whether you, the investment community, individually and collectively are willing to pay the price necessary for having an insurance and investment regime in which the public can place its confidence.
"If you are not, then the future for intermediaries - insurance and investment may not be so bright as one would like to feel on occasions like this."
Mr Rabbitte said: "The customer's rights, the consumer's rights come before all else. I believe that we will need to put in place a much tougher proactive regulatory regime coupled with an adequate compensation system, and provision of appropriate consumer information.
But IBA president Mr Frank Murray mounted a strong defence of its handling of the events surrounding the collapse of the Taylor and Taffe investment broking companies.
"Some have claimed we are irresponsible or negligent . . . This I emphatically deny," Mr Murray said. "We did everything according to the book and within the legal constraints which bind us."
Mr Murray said the IBA "is stronger than ever, despite the serious setbacks which it received this summer with the loss of the Dawson action, which is under appeal to the Supreme Court, and the collapse of the Taylor Group".
Stating that the strength of the IBA was demonstrated by the way it dealt with such problems, Mr Murray said: "I believe that the response from this association. . . to the problems which it has had to confront in recent months has been outstanding."
