Sarah Wilson, Director of FSA’s High Street Firms Division, has confirmed that applications from GISC, MCCB, IIBRC members in good standing will receive “a level of scrutiny which reflects the standards set by GISC”.
In a letter to Chris Woodburn, Chief Executive of GISC, on the nature of “Due Credit”, Sarah Wilson explained that “GISC requirements and compliance programme provide sufficient evidence for the FSA to be able to regard your members in good standing as posing a lower risk to our statutory objectives than other otherwise-similar applicants.”
The letter also confirms:
- in the case of applications where closer enquiries are deemed appropriate, the final judgement by FSA will be influenced by the degree and intensity of regulation that has previously been applied to the firm;
- regard may be given to the length of time that a firm has been subject to voluntary regulation;
- a member in good standing with GISC that resigns its membership between the date of application and the start of statutory regulation will be subject to further scrutiny.
Chris Woodburn said he was pleased at the decision to confirm GISC members would receive due credit in the FSA authorisation process and added “In making the decision to give GISC members due credit, the FSA has considered GISC’s criteria and process for granting membership, how GISC’s rules compare with those of the FSA, the extent to which GISC monitors compliance with those rules, and the action GISC takes when breaches occur. In these respects, GISC is able to demonstrate a unique approach to the current regulation of general insurance intermediaries.”
Illustrating his point, Chris Woodburn continued: “The monitoring of members plays a key role in our regulatory activities, and ensures our standards are meaningful and respected throughout the industry and by FSA in particular. Another example of the wide-reaching impact of our regulatory activities is our consumer helpline which has taken some 21,000 enquiries since it was established in July 2000. Since large numbers of enquiries are satisfied at the point of first contact, the insurance industry as a whole effectively benefits from these customers who are reassured by a response from GISC as an independent body.” *
Chris Woodburn concluded: “The FSA is applying a level of due credit to GISC members commensurate with the standards established in June 2000. We will continue to monitor and enforce these standards to ensure uninterrupted consumer protection, and to make certain that the due credit afforded to members is valued by FSA on GISC’s own, distinct merits”.
