AM Online

FSA doubles size of inspection team

The Financial Services Authority has more than doubled the size of its inspection team to around 400 staff and has vowed to go crack down on unauthorised firms.

“The No 1 priority for us now is to look for firms who are trying to do general insurance business without authorisation.” warns Robin Gordon-Walker at the FSA.

Commenting specifically on the motor trade, he adds: “We will be looking out for how they are reacting under the new regulation. Are they treating customers fairly? Are they giving them the information that’s required? Are they authorised? If not, they will either have to get authorised very quickly or stop selling insurance products.”

Iain Stephen, of Compliancy Services, warns that any discrepancies will be highlighted during annual company audits which must be reported for plcs and limited companies.

He believes that in the course of their normal audits it is “unlikely the FSA would come down hard on companies who had made a reasonably good attempt at delivering against the requirements”.

But he adds: “They are unlikely to be sympathetic with businesses that have made commitments in their HSF 1 application to have documented procedures in place for sales, recruitment, training, competence and complaints and have made no attempt to deliver against these commitments.

“The use of the status disclosure document, assessing customers’ demands and needs and dealing properly with complaints, is fundamental to treating customers fairly. Businesses neglecting these basic tasks are likely to incur substantial fines.”

Guy Allman, of BTC, says the appointment of extra inspectors shows the FSA is serious about responding to complaints.

“If somebody says they have been mis-sold an insurance product the FSA will go into action. They will come and inspect your systems and your records,” he says.

Retailers who submitted applications in time for the January 14, 2005, deadline have been granted interim authorisation to continue selling insurance while awaiting full approval, provided they operate within FSA requirements.

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Comment as guest


Login  /  Register

Comments

No comments have been made yet.