Update to the cost of regulation: Report to the British Insurance Brokers Association

The present report updates and expands the information on the direct and indirect cost of regulation provided in the 2011 study 'Future regulation for insurance brokers' which had been prepared for the British Insurance Brokers Association (BIBA). The present analysis focuses on direct and indirect regulatory costs:

• Direct regulatory costs include all the fees and levies insurance brokers have to pay annually as a condition to be authorised to undertake insurance intermediation activities. In some cases both the insurance broker firm (a legal person) and the employees of the firm are subject to compulsory fees and levies.

• Indirect regulatory costs include the expenses incurred by insurance brokers in complying with the regulations and other requirements of the relevant authorities.

The second section of the report provides information on the direct cost of regulation in the various jurisdictions of interest for hypothetical insurance broker firms of three different sizes. The third section presents the results of a survey of UK insurance brokers on direct and indirect costs of regulation in the UK.