FSA's July deadline is approaching fast. There are now just 19.5 weeks left to July 13 – the deadline for retailers to submit applications to the Financial Services Authority to guarantee that they become authorised to sell and advise on insurance-related products from January 14, 2005. Applications need to include details of training and competence, corporate governance, senior management systems of control, complaints handling and personal insurance cover.
Dealers can register with the FSA for an application pack via www.fsa.gov.uk/MGI/ or by calling the FSA on 0845 6055525.If you have any questions for our panel, please phone Helen Bateman on 01733 468259.
YOUR FSA QUESTIONS ANSWEREDQ We give away warranties, free, as part of our used car sales package. Surely we don't have to be authorised by the FSA to do this? – Ian Alderman, Iwerne Minster Car Sales, Blandford, Dorset
A The issue is not whether a charge is made but whether or not the warranty is deemed to be a contract of insurance which is why free motor insurance provided by manufacturers with new cars will also be affected.
If the supply is considered to be insurance, then authorisation will be needed. The FSA has already issued guidance about what it considers insurance to be, but a legal definition is expected when the full findings of the FSA's consultation paper CP150 are published in April.
Current indications are that in some circumstances, if the warranty is not a direct contract of insurance between an insurance company and the end customer and is not charged for separately, authorisation will not be needed. However, we need to await the outcome of CP150 before we can be sure of this. Tim Heavisides, chief executive, Car Care Plan
Q Is pure car finance covered by the FSA regulation? – Arthur Prince, chairman, Arthur Prince Group, Loughborough, Leicestershire
A If the finance contains no element of insurance – no payment protection cover or GAP – then that product would not be regulated.
However, any insurance linked to the finance would mean that authorisation was required, as would the sale of any other insurance product by the dealer. The provision of finance on its own is already subject to the Consumer Credit Act, and dealers have to be licenced for this. Tim Heavisides, chief executive, Car Care Plan