Law firms urged to join independent insurance regulatorHundreds of law firms which sell or advise clients on insurance products may have to take up membership with a new independent regulator, the General Insurance Standards Council (GISC), it has emerged.

Although a date for compulsory membership has yet to be set, most major insurers have already signed up.

Membership - or other arrangements to register firms as agents or introducers of insurance companies - became inevitable when the Office of Fair Trading gave the GISC's draft rules the go-ahead at the end of last month.

Under the rules, only GISC-registered members will be able to deal with other members.

The requirement is likely to catch many high street firms and personal injury firms, which deal with after-the-event insurance products.

The cost to members of joining the GISC is 0.1% of commission earned from the sale of insurance products or a minimum joining fee of 200.

Firms may also have to comply with financial solvency requirements.

Any insurer or firm dealing with a non-member could face sanctions ranging from fines to public reprimands and expulsion from GISC.

Alison Crawley, the Law Society's head of professional ethics, said solicitors receiving letters from insurance companies urging them to join GISC should wait for the outcome of negotiations between the two organisations.

She explained: 'We have been in discussion with the GISC about the special position of solicitors...

We hope to find a way forward that will recognise that many firms will not need to be registered with the GISC because they often act merely as introducers.'LINKS www.gisc.co.ukSue Allen