Moore Stephens: Brokers Must be Ready
Wednesday, February 26, 2003
Accountant and consultant Moore Stephens has warned that U.K. insurance intermediaries will have to ensure that they are well positioned
to take their place in the new regulatory regime currently being formulated
by the Financial Services Authority (FSA).
A new FSA regulatory regime governing general insurance intermediaries will
come into force in October 2004. There are still a number of unresolved
questions involving the nature and extent of the new regulations, but the
answers are expected to emerge over the coming months. What does seem
certain, even now, is that the new regime will be much tougher than anything
which went before it.
The FSA has developed proposals under seven main headings - firm status
disclosure, standards for advising and selling, standards for training and
competence, product information measures, measures to ensure fair treatment
of customers, standards for claims handling, and complaints.
Writing in the latest edition of the Moore Stephens insured interest
newsletter, partner Michael Butler says, "It seems that the FSA intends to
exceed the minimum regulatory requirements mandated throughout the European
Union under the Insurance Mediation Directive, which covers the activities
of intermediaries and which will be implemented in the UK by the new FSA
regime. So brokers and intermediaries have no time to lose in making sure
that they understand the requirements that will be placed upon them, and
that they are well-prepared to meet the FSA's demands.
"The new FSA regime will impose on insurance intermediaries a much more
onerous burden of regulatory compliance and risk management preparedness.
For many, this will mean a complete change in the way they approach and
conduct their business. The time to act is now. Those who hesitate may be
lost to the industry for ever."