An investigation into the occurrence of financial crime in the insurance industry could be on the horizon for the Financial Services Authority (FSA), which this week launched a reporting system which enables insurance firms to share intelligence with the watchdog on suspected criminal behaviour by intermediaries.
The new reporting system will make it easier to identify financial crime, such as failing to pass on premiums or refunds to customers or issuing false insurance certificates, committed by intermediaries who sell insurance products directly to consumers.
"We want to know when a firm has suspicion or evidence of malpractice so that we can act on it where appropriate," the FSA's director of small firms, Stephen Bland, explained.
Eric Galbraith, chief executive of the British Insurance Brokers' Association, welcomed the move, describing financial crime as "detrimental to the entire industry", and emphasising insurers' commitment to "ensur[ing] that consumers are protected".
If the reporting system turns up evidence of widespread, significant insurance fraud, the FSA will launch a formal investigation into the insurance sales sector.To learn more about insurance, click here.
© Adfero Ltd