Insurance - FSA regulation

The Financial Services Authority (FSA) took on responsibility for regulating general insurance business from 14 January. It now regulates the sales, advisory and service standards of insurers, intermediaries, agents and anyone acting for them. The regulations cover firms such as motor traders which sell insurance as a secondary activity, but do not apply to travel insurance sold as part of a holiday package, nor to extended warranties sold in connection with domestic electrical goods such as washing machines.

Only firms authorised by the FSA, or who have applied for authorisation, can now trade. They are subject to strict guidelines on policy promotion and selling. Firms will be legally required to issue documents that clearly and simply explain policy details, provider and price.

Insurance customers now have access to the Financial Ombudsman Service and the Financial Services Compensation Scheme.

The new regulations replace the industry's self-regulatory regime, which was overseen by the General Insurance Standards Council, now abolished. More information is available from the FSA website at www.fsa.gov.uk.

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