The FSA's 'perimeter team' includes both supervisory and enforcement staff and its programme of visits across the UK is well underway. They have already visited over 500 firms in Birmingham, Derby, Leicester and Nottingham, and other areas of the UK will be visited soon.
The firms being contacted have been selected on the basis of a number of information sources, including the FSA's database of firms that registered or applied for authorisation but later withdrew. The FSA is also responding to leads received from the industry and the public.
Clive Briault, FSA managing director of Retail Markets, said: "Tracking down firms operating outside our regime is a major priority for the FSA. This is vital to protecting consumers since they do not have access to statutory redress and compensation if they deal with unauthorised firms. At the same time we urge consumers to check the status of the firm they are dealing with before conducting business with them. Details of authorised firms can be found on our web site."
"By cleaning up the industry we are levelling the playing field for legitimate authorised firms. Firms that are conducting general insurance business illegally should act now and either become authorised or stop carrying out that side of their business."
The FSA will not put firms out of business unnecessarily. Where breaches are inadvertent, or result from genuine misunderstanding, options for the firm will include obtaining proper authorisation. However, in order to protect consumers, the FSA can choose not to authorise firms that have wilfully breached parts of the Financial Services and Markets Act and can take criminal proceedings if necessary.
The programme includes visits to both primary intermediaries (brokers who sell insurance as their main business) and secondary intermediares (firms who sell insurance as a secondary activity to their main business). Within the secondary market the FSA has initially focused on motor dealers, property managers, travel agents, high value retail outlets, and removal and storage firms.
The FSA will be publishing the detailed findings of the general insurance perimeter work later this year.
