FSA: Review of insurance regulation pending

09 May 2006
The Financial Services Authority (FSA) is to conduct a review of its regulation of the general insurance industry.

It has now been just over a year since the FSA began its regulation to try to establish industry standards and maintain them across the spectrum and the review will give an indication of how it believes it has performed in the role.

Rules that were established by the FSA, including those on advertising applicable rates for insurance and making sure policies are accurately portrayed to potential customers, will be scrutinised for their content and to see if they are being adhered to.

"We are now trying to see if it's working," said Robin Gordon-Walker, a spokesperson for the FSA.

Mr Gordon-Walker argued that, although some parts of the policy were not exactly what they had in mind to regulate the industry, EU law dictated what they could and could not do.

"Our general insurance regulation comes under the EU directive so we had to implement it even if there are some bits of it we don't agree with."

One particular complaint in the industry at the moment is that the cost of regulation is disproportionate to the risk when it comes to smaller firms, according to the British Insurance Brokers' Association.

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