Lobbying efforts against proposed professional indemnity (PI) insurance legislation is "scaremongering", claims the FBAA.
This week, Australian Broker
reported on the MFAA urging brokers to support its lobbying efforts to stop changes to professional indemnity insurance legislation, which proposes an increase of professional indemnity insurance to $20 million in the aggregate, from a current figure of $2 million per claim and up to $6 million in the aggregate.
The MFAA claims that, if passed, these changes will be a significant cost for broker businesses and could harm broker/client relationships.
However, the chief executive of the FBAA, Peter White
– who says the FBAA has spoken to people “at the highest level” regarding PI insurance – has labelled talk of spiralling PI costs as “misguided” and “scaremongering”.
“Yesterday’s story in ‘Australian Broker’ simply reports proposals by an organisation that has no great influence in this field, and would only affect anyone who acts as an agent for a lender, solicitor or conveyancer on conveyancing matters for verification of identification,” he said.
“Even if the proposals carried any weight, they would apply to probably less than 1% of brokers, and then only on conveyancing activities not broking activities.”
When Australian Broker
queried the FBAA as to who they have spoken to “at the highest level” regarding PI insurance, a spokesperson said it was “regulators, insurance companies and government”.
White has also condemned the MFAA for publicly calling on FBAA members to support its lobbying efforts, without consulting the FBAA first.
“We have already dealt with this issue at a higher level and would not want to see our members wasting their time supporting lobbying efforts against an issue that will likely never eventuate and is clearly not properly understood by those coordinating the lobbying,” he said.
“The FBAA continues to liaise with key stakeholders on this issue, and have sought further clarification from them since this article appeared.”
However, the chief executive of the MFAA, Siobhan Hayden told Australian Broker
that she is standing behind the lobbying efforts and will not apologise for speaking up about any changes that have the potential to harm brokers.
“We make no apologies for advocating strongly against any possible change that has the potential to impact negatively on our members and consumers,” she said.
“Unfortunately due to previous lack of sufficient detail from ARNECC the reasons behind the changes to the PI insurance, and the extent to which they will affect brokers have not been clear.
“Our liaison with ARNECC is ongoing and we will continue to fight to ensure the best results possible for our members and consumers, right up till the date new regulation comes into effect, and beyond.”