Over the next three years the FSA intends to have contact with the 11,300 firms which it defines as small. The intention is to have an in-depth, hour-long conversation with the approved person/senior manager about treating customers fairly (TCF). It then intends to visit at least a quarter of these firms.
The exercise is to assess progress in fulfilling the ‘treating customers fairly’ requirements and delivering the TCF outcomes. There are two further deadlines this year and the regulator is mindful that only 41% of small firms were doing something meaningful about TCF before the last deadline in March 2007.
The FSA is determined that all firms, however small, should engage with TCF and drive up standards. It will not come as a surprise that this will mean higher fees.
The new Insurance Conduct of Business Sourcebook (ICOBS) rules have been published, with July 5 as the date for implementing the changes.
One of the key changes is the classification of products. You must, if you are either making non-advised sales and/or selling payment protection insurance, review your sales process against the new requirements and make the necessary changes.
If you sell GAP, extended warranty, MoT insurance etc and believe you are meeting FSA standards now, then you do not have to make any changes to your current sales process. However, if you use the FSA pro forma IDD, you have until January 6 to make a small change to the first section. For more details, call Alliance Consultancy on 0845 226 2970.