In-sure

FSA publishing the new Insurance Conduct of Business Sourcebook

This month's edition sees the FSA publishing the new Insurance Conduct of Business Sourcebook, a new tax regime for insurance companies, the connected travel insurance becoming regulated, the FSA warning insurers that ARs are failing to treat customers fairly and CEIOPS publishing a set of papers in preparation of Solvency II...

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November 2007

Permitted links for long term insurance business 

Large amounts of money are invested in unit linked investment funds every year. Yet, these investments used to be subject to a regulatory regime that has been implemented in 1994 and has not substantially changed until recently. With Policy Statement 07/17 "Permitted links for long term insurance business" the Financial Services Authority (FSA) decided to completely revamp the permitted link regime and updated the classes of assets which are allowed as investments in unit linked contracts.

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August 2007

In July 2007 the Financial Services Authority (FSA) published on its website "Provider and Distributors Regulatory Guide Instrument 2007" (FSA 2007/41). The Annex to this instrument sets out the text of the new Regulatory Guide "The Responsibilities of Providers and Distributors for the Fair Treatment of Customers" (Guide) by which FSA expresses its view on the various duties owned by product providers or distributors to retail customers during the life-cycle of a product under the FSA Principles and under detailed rules. The Guide takes into account changes to the Handbook that have already been made or are due to come into force on 1 November 2007 with the implementation of MiFID.

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July 2007

FSA process guide to decision making on Schemes of Arrangement for insurance firms

In this paper, the FSA explains how it engages with Schemes of Arrangement (Schemes) and, in particular, their process for reviewing the Schemes which the firms they regulate propose and the criteria they use in that assessment. Their 11 Principles for Businesses set overall requirements for all financial services firms. As part of principles-based regulation, their aim in this publication is to give the reader predictability, consistency and certainty on the tests they will use to determine whether a firm has acted appropriately in relation to these principles in promoting a Scheme. This paper will be of interest to anyone involved in the UK insurance run-off market – including the management, advisers and policyholders of firms proposing Schemes, trade associations and market commentators

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April 2007

FSA sets out future of regulation

This press release draws attention to various material issued on 23 April 2007, at an FSA conference on More Principles-Based Regulation. This includes a 28-page paper entitled "Principles-based Regulation - Focusing on the Outcomes that Matter", and a new suite of pages on the subject in the small firms part of the FSA website. The material does not herald any significant new developments, in that the FSA have been talking for some time about the move to a more principles-based approach. The main purpose appears to be to reinforce the message that the change is beginning to happen for real, and to provide some examples to relate the theory to actual practice. The small firms pages for example contain a couple of specific examples (one relates to supervision and monitoring of financial advisers, the other to a complaints matter) drawn from actual casework of how FSA would expect firms to deal with particular issues taking a principles-based approach.

April 2007

FSA finds many small firms that employ compliance consultants are not acting on the advice they are given

This press release (issued on 17 April 2007) relates to some work FSA have recently done on the use of compliance consultants by smaller firms. They visited 22 firms who used compliance consultants; it appears that over a third of these were not acting on recommendations from their consultants that would have improved their regulatory position. There is some further information on the small firms website which makes the point that consultants are not a panacea and a firm cannot contract out its compliance responsibilities. But there are some good practice examples showing how the right relationship with a consultancy can provide positive benefits in terms of compliance.

Press release | Website material | Factsheet