All systems go as 'GI-Day' arrives
From 14 January – 'GI-Day' – customers taking out or renewing a general insurance policy will enjoy additional protection, as the FSA takes over responsibility for regulating general insurance sales, advice, administration, and arranging involving about 40,000 firms in all.
This is a major extension of the FSA's role, involving direct supervision of thousands of firms and benefiting some 35 million UK consumers who take out or renew 77 million policies each year for home and contents, vehicle, medical, payment protection and other types of general insurance.
Among the many advantages of the new regime will be clearer information for consumers about general insurance policies through newly introduced 'keyfacts' documents. Consumers will be able to compare insurance policies more easily, with clear information on any significant and unusual exclusions, understand the nature and cost of the policy they are buying and have access to the Financial Ombudsman if they have a complaint and to the Financial Services Compensation Scheme if firms go out of business.
John Tiner, FSA Chief Executive said: “The FSA has worked closely with the insurance industry to develop a workable and proportionate regime and to achieve a smooth transition into the new era. We are pleased with the co-operation we have had from the industry and the wholesale markets and the way they are rising to the new challenges ahead. Regulation is acting as a catalyst for change bringing benefits to both consumers and to the efficient operation of the insurance markets.
“An early priority for us will be to enforce the perimeter of the new regime and crack down on any firms that may consider continuing with unauthorised and illegal selling and arranging of insurance.”
Details of firms regulated to conduct general insurance business – either directly authorised or as appointed representatives of authorised firms – have been placed on the FSA Register today. This information enables insurance companies and customers to check whether the firms with which they are dealing have the appropriate authorisation. This can be done using the Firmcheck service on the FSA website or, for consumers without internet access, by calling the FSA's help line on 0845 606 1234.
As at 14 January, the total number of directly authorised firms able to conduct general insurance business is 18,130 – 13,291 new authorisations and 4,839 variations of permission. In addition, authorised firms with a general insurance permission had a total of about 22,000 appointed representatives.
Applications from a further 941 firms are still being processed. Under arrangements announced by the government last month, these firms can continue to sell or arrange general insurance on an interim basis until a final decision is reached on their application. It will be illegal for firms that did not submit complete applications to the FSA by midnight on 13 January to carry on business from 14 January.