The Association of British Insurers (ABI) has said that consumers are paying higher car and home insurance premiums as a result of the introduction of regulation to the industry.
The Financial Services Authority (FSA) saw its remit extended to general insurance in January 2005, but the ABI claims that customers are now being "bombarded" with regulatory information when searching for a policy.
The ABI estimates that the cost of regulation works out at around £400 million a year and says its member companies are being forced into passing this on to consumers.
Taken together with the burden of the paperwork, this means many consumers are finding it much harder to shop around for the best insurance deal, according to ABI director general, Stephen Hadrill.
He called for a system that used general principles to replace the current one, which was overly prescriptive and unpopular with customers themselves.
He added that the ABI had commissioned research that found over a quarter of policy holders thought the process of getting quotes and finding the right deal took too long.
The rules introduced in January last year require brokers to provide their customers with information about how many products they sell, including travel insurance, home insurance and car insurance.
They are also obliged to tell consumers how they can complain about a product during the sales process itself. To read more about home insurance, click here.
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