Under the new regulations no authority means no sales, so anyone who wants to sell products which fall into an FSA regulated activity from next year will have to apply at least six months before the regulation start date to be confident of being able to continue that activity legally.
Simple. Or it should be. We make no apology for yet again talking about the FSA regulation deadline – for the simple reason that few dealers have applied for authorisation. That's the feedback we've been getting from insurers, warranty providers,
compliancy training specialists and software providers who are out in the market talking to retailers. There are no hard statistics, but the general consensus is that unless many fingers are pulled out, and fast, there's going to be an automotive F&I crisis in 2005. Not even the carrot of discounted fees seems to have encouraged the industry to act – the FSA's website (www.fsa.gov.uk) enables dealers to apply electronically, and those with annual insurance incomes of less than £1m who do apply online before June 1 will qualify for discounted fees – £500 instead of £630 for a single application.
As AM went to press the FSA had received 13,774 requests for application forms. The bulk was from the secondary general insurance market (that's motor retail as well as dentists and vets) while mortgage brokers accounted for 36%. That's quite encouraging until until you hear that just 4,630 completed applications for authorisation have been received. The FSA was unable to tell us how many of these were from dealers but says at least 70% was from the mortgage sector (that means at most, and it's probably a lot less, 1,389 dealers have submitted their application. There are 5,149 dealer sites in the UK).
Publicly, the FSA has declared itself sufficiently geared up and adequately staffed to deal with any flood of applications from the secondary general insurance market. At a training and competence conference on April 2, the FSA's high street firms director Sarah Wilson, said: “We are delighted with this level of engagement and are working hard to process all these applications using new streamlined processes.”
Wilson sounded quite happy with the situation. No doubt she'll be even happier when the first fines are dished out.