THE Irish Brokers' Association has called for some "improvements" in the legislation governing insurance brokers, ahead of the expected appointment on November 20th of a liquidator to Mr Andrew Reynolds and Associates.

ARA which owes about £1.4 million to a number of insurance companies is going into voluntary liquidation. Mr Paul Carty of the IBA said: "There appears to be no client money at risk."

A number of brokers are believed to have been approached by some of the creditor insurance companies and invited to bid for the client list and ongoing income of ARA. But some insurers are understood to have approached some ARA clients informing then that the broker's agency had been cancelled and asking the client to deal directly with the insurance company.

ARA director, Mr Tony Ulhemann, was dealing with client and creditor inquiries yesterday. He declined to comment, referring inquiries to the company's solicitor, Mr Ed Butler of LK Shields. Mr Butler confirmed that the business is for sale.

As the regulator for insurance brokers, the IBA will have to look closely at the collapse to see what questions arise, Mr Carty said.

Under existing legislation, insurance brokers must set up a separate client account. Section 48 of the 1989 Act requires that insurance premiums paid by clients be lodged in a separate account for onward payment to insurance companies. The IBA, as regulator, verifies that this account is in order every year.

IBA carries out this annual compliance check (MTS 26) in October each year, Mr Carty said. However, the latest verification of ARA's position was for July 1994. "The July, 1995, position was being sought," he said.

Mr Carty said IBA required brokers to submit in October figures for the year up to the end of the previous March 23rd. Because ARA's year end was July the regulatory forms that fell due on October 1st, 1995, covered the year to end July, 1994, he said.

The July, 1995, information fell due on October 1st this year and the information "was being sought", he said. IBA gives brokers up to October 25th to file the information he added.

He said he was satisfied with this regulation and added: "We are mindful of regulations under the Act." IBA regulates 3,700 intermediaries, some of whom are sole proprietors who do not have to produce accounts until 12 months after their year end, he said.

While payments from clients must be held in a separate account there is nothing in the Act covering payments out of the account, he said.

He said the MTS 26 worked "fairly well" but the legislation needed to be strengthened by provisions for disembursements from the account.

Insurance companies allow brokers one to two months credit before they have to hand over premiums paid by client.