The General Insurance Standards Council (GISC) has been advised by the Financial Secretary to the Treasury that the FSA will now take over the regulation of general and health insurance on 14 January 2005.
In a letter to Chris Woodburn, GISC chief executive, Ruth Kelly MP wrote: “I am now in a position to announce a firm timetable for regulation of mortgages and general insurance. This is as follows: implementation of regulation of mortgages and long term care insurance to be 31 October; mediation of other general insurance to be implemented on 14 January 2005.” Following the finalisation in September 2002 of the EU Insurance Mediation Directive, the Treasury and the FSA had been working towards a transition date of October 2004 However, the directive was only formally published in the EU Official Journal on 15 January 2003, and EU Member States have only up to two years to comply with the directive.
“Given the vast number of businesses that will be affected by statutory regulation, and the necessity for full and detailed consultation on a number of key issues, it makes good sense to set a date which allows the maximum time for preparation,” says Woodburn. “This is a judicious move which demonstrates that both the Treasury and the FSA recognise the enormity and complexity of the task ahead.” Woodburn confirmed that the GISC would continue to work closely with the Treasury and the FSA to ensure a smooth transition to statutory regulation, but added that there was still much to do.
“There remains a tight timetable for a significant amount of work,” he said. “The good news is that firms who have not yet joined the GISC have more time to become compliant with GISC requirements and to qualify for due credit when applying to the FSA for authorisation.”