The FSA has gone some way to allaying industry fears by confirming that a one-size-fits-all approach to regulation will not be applied to intermediary firms and individual product areas within the general and health insurance industry Sarah Wilson, director, high street firms division, at the FSA, recently addressed the general meeting of the Association of Medical Insurance Intermediaries (AMII) and said that “one size will absolutely not fit all – there is a lot of differentiation across the types of consumer and types of product within the general insurance industry”.
She added: “We are acutely aware that the cost of regulation falls differently on large and small intermediaries. The FSA should distinguish between small and large firms in this market – although it hasn’t done this before. We will be consulting on this matter.”
Wilson also confirmed that the FSA will be consulting on commission disclosure, solvency requirements, product transparency, and whether all staff advising on and selling products within a firm should apply for authorisation.
She also said that the Treasury was considering an ‘appointed representative’ regime, which would allow an intermediary firm to be exempt from authorisation if another authorised organisation, such as a network, took responsibility for it with regards to compliance and training etc.
Intermediaries will need to start applying for authorisation in the second half of 2003. If the authorisation process is not completed by October 2004, when statutory regulation is due to start, firms will not be permitted to continue in business.