The FSA is ready to receive completed application forms for intermediaries seeking direct authorisation.
Sarah Wilson, director of the High Street Firms Division, said: “The regulatory regime for general insurance is now in place. Insurers and intermediaries need to get cracking on their preparations for regulation.”
She added: “Insurers will need to satisfy themselves that all the links in their supply chain affected by regulation become either authorised or an appointed repesentative (AR). Insurers will not be able to continue doing business with unauthorised intermediaries.”
Chris Cummings, director at the Association of Mortgage Intermediaries (AMI), which plans to release a summary of the rules to members this week, said: “The rules on general insurance are much longer than the mortgage rules, so, for mortgage brokers, it’s a far bigger job to go through the paper for far less reward.”
He added: “Mortgage brokers still need to decide to opt for directly authorised or AR status for regulation. There is nothing in the final insurance rules to change anyone’s mind if a decision was already made.”
Key reforms include, for example, recognition of network PII policies providing coverage for more than one firm and provisions setting in stone the segregation of client premiums from funds the FSA defines as belonging to the insurance firm.
Richard Griffiths, managing director of Network Data, said: “There are no surprises in PS 04/1 and the FSA confirms that firms should be given the flexibility to use a combined initial disclosure document (CIDD) rather than make its use mandatory. However, mortgage and insurance firms will not be allowed to use the CIDD before the onset of insurance regulation on 14 January 2005. Until then, they must only use the mortgage IDD as from 31 October 2004. Firms should ensure that their software system enables them to make a smooth transition on both 31 October and 14 January.”
For more information, see www.fsa.gov.uk/mgi
