FSA review says GI regulation is working
Having visited over 1,700 firms selling insurance on a primary or
secondary scale the investigation revealed two primary and 14 secondary intermediaries were wilfully acting illegally in their selling of
Firms that were found to have unwittingly breached guidelines or misunderstood certain elements were advised by the FSA on how to overcome these obstacles and given a number of options to adapt their business model. These included restructuring their businesses so they did not need to be authorised or becoming authorised. In some instances the FSA took measures to ensure the firms could no longer conduct insurance business.
Commenting on the findings Clive Briault, FSA managing director for retail markets, praised the changes firms had undertaken since regulation in January. He said: “We have been impressed with the level of understanding of the new rules in both the primary and secondary insurance markets with most firms aware of the need to be authorised if they undertake regulated activities.”
Alan Lakey, senior partner at Highclere Financial Services, agreed the findings revealed good practices were being undertaken and followed. He said: “The figures are to be expected and the only real surprise was there were two intermediaries who flouted the regulations. There was
no reason why they wouldn’t have known about it.
“It is easy enough for companies to check on the FSA website if someone is authorised or not so perhaps the companies that use them should accept some responsibility.”
Lakey went on to suggest FSA resources could have been put to better use: “I don’t quite know why the FSA chose to use its resources looking into an area that was pretty much a foregone conclusion.”