“The reform of insurance regulation continues to be at the top of the FSA’s list of priorities and the insurance industry should be putting it at the top of theirs,” says Tony Wiltshire, managing director of FSA Consulting Limited and author of two in-depth fact files on the conduct of business rules just launched on the CII Information Services website.
Following wide-ranging consultations, most of the rules which will apply from 14 January 2005 are now in place. It's important that everyone in the industry understands the far-reaching implications of the changes, which is why the CII has commissioned these fact files as a service to its 70,000 members.
There are two distinct aspects to the FSA rules and guidance, explains Tony Wiltshire, applicable to insurance companies, brokers and IFAs:
1. Prudential rules underpinning the business, including fit and proper requirements (approved persons), solvency margins (capital adequacy), redress (dispute resolution through the Financial Ombudsman Service) and compensation (through the Financial Services Compensation Scheme).
2. Conduct of business rules governing the marketing and selling of financial products, before, during and after the sales process. The conduct of business rules for life and investment business are already in place but will undergo change during the next 12 months as the rules to implement the insurance mediation and distance marketing directives, reform of polarisation and changes to key features documents are implemented.
The new fact files cover the conduct of business rules (one on general insurance, the other on life and investment business), complementing existing files by Tony Wiltshire on the CII site, which cover the prudential rules for insurers and intermediaries. All these fact files are monitored regularly for currency and updated as necessary – particularly important in the run-up to 14 January.
CII members can access these fact files at www.cii.co.uk/is/regulation.
