The chief executive of the Irish Insurance Federation, Mr Mike Kemp told Family Money that it did not accept the CAI's view that the existing regulator for its industry - the Department of Enterprise and Employment -is not acting in the best interests of consumers or that the insurance industry has a greater influence over the Department in the matter of legislative or regulatory changes than any other interested party, including the CAI.

Any regulatory function the IIF does have (i.e. of intermediaries) was taken on at the behest of the Department and was not sought, said Mr Kemp.

While accepting that there was some virtue in a central agency to which consumers could go if they had a problem with a financial product or service, he said he thought it would be difficult for one regulator to adequately integrate the supervision of both companies and intermediaries, especially since the range of institutions referred to by the CAI - banks, building societies, investment houses and insurers - was so broad. Mr Kemp said he would welcome further discussions on the subject and has invited the director of the CAI, Ms Caroline Gill, to address the federation.

In its continuing effort to protect consumers against both outright fraud and bad advice, the Consumer Association of Ireland (CAI) has called for the establishment of a Financial Consumer Regulator which would oversee the activities of financial institutions and intermediaries who market, sell and distribute investment, banking, mortgage and life assurance products. It would also deal directly with consumers.

In an angry denunciation of the powerful influence that financial lobbies have had on the drafting of existing consumer legislation and regulation, the CAI describes the new Regulator as "counterbalancing" these strong lobbies by protecting consumer rights. It would not replace outright the existing regulators - such as the Central Bank (for investment intermediaries), the IBA and IIF for brokers and life assurers and the Department of Enterprise and Employment, but rather these area regulators would be accountable to the new Regulator.

In the case of the Department and the Central Bank it says that because of their day-to-day dealings with financial product manufacturers they "should not be exclusively responsible for protecting the financial consumer" since that protection "may not be palatable to manufacturers and distributors". It also calls for the relocation of the Office of the Director of Consumer Affairs out of the Department of Enterprise and Employment. The CAI's call for centralised, independent regulation comes on the heels of a number of high profile scandals such as the disappearance of investment intermediary and former president of the IBA,Mr Tony Taylor.

The CAI is critical of the fact that partly because of the successful lobbying of vested financial interests there is no adequate compensation scheme in place; that no responsibility is taken by financial institutions for the actions of intermediaries who have agencies with their com panies; that there is no measurement of standards under which financial institutions and their inter mediaries operate.

The chief executive of the Irish Insurance Federation, Mr Mike Kemp told Family Money that it did not accept the CAI's view that the existing regulator for its industry - the Department of Enterprise and Employment -is not acting in the best interests of consumers or that the insurance industry has a greater influence over the Department in the matter of legislative or regulatory changes than any other interested party, including the CAI.

Any regulatory function the IIF does have (i.e. of intermediaries) was taken on at the behest of the Department and was not sought, said Mr Kemp.

While accepting that there was some virtue in a central agency to which consumers could go if they had a problem with a financial product or service, he said he thought it would be difficult for one regulator to adequately integrate the supervision of both companies and intermediaries, especially since the range of institutions referred to by the CAI - banks, building societies, investment houses and insurers - was so broad. Mr Kemp said he would welcome further discussions on the subject and has invited the director of the CAI, Ms Caroline Gill, to address the federation.