January 2007

FSA recognise industry solution to contract certainty

FSA announced on 24 January 2007 that "the [insurance] industry has met the challenge laid down to achieve a solution to contract certainty in the UK". The industry has reported that 90% of contracts in the subscription market and 88% in the non-subscription market are now achieving contract certainty (the complete and final agreement of all terms between the insured and insurers before inception).

While the industry solution has dealt with the perceived market failure without the FSA having to make new rules, FSA will continue to treat contract certainty as a supervisory priority in 2007, and will consider action against any firms found to be falling behind the rest of the market in reducing the number of contracts that do not meet the market's contract certainty standards.

Some examples of good and bad practice were included with a dear CEO letter sent to firms in December 2006.

Press release | Dear CEO letter (December 2006)