A new year - a brave new world

Welcome back to what is set to be a historic year. And, on behalf of Professional Broking, I would like to wish all readers a happy and prosperous new year. So, it's 2005 and Financial Services Authority regulation has finally arrived. After all the scraps and complaining it seems compliance may not be so bad after all. The FSA, as suspected by many, has now given up to a year's grace for firms that managed to get their application in before 14 January. So it is Happy New Year from the regulator too. Of course the FSA also hopes this will enable the raft of secondary intermediaries - that were slow to act with regard to regulation - to go on selling general insurance while their applications are being processed.

The good news is that primary general insurance brokers were better prepared for GI day, with more than 6000 receiving scope-of-permission notices at the time of going to press. PB's FSA Regulation supplement, I hope, will provide further advice and interest on the areas that are of most concern to brokers and it is encouraging that the FSA will allow firms plenty of opportunity to make any necessary changes to comply before threatening enforcement action such a fines or worse.

It has been said that regulation will bring a new era of professionalism to the broker market and to the industry as a whole, with greater openness and improved skills. It is also often said that regulation will help with the much-needed improvement of its public image to attract more quality employees, in particular graduates. Brokers should now grasp the opportunity to shout about their new regulated status and take steps to ensure their clients know about the hard work they have put in and how it will result in better standards of care.

Fears of a softening market also seem to have been partly been allayed, with insurers digging in their heels and refusing to budge over rogue competition. An example is Norwich Union's letter to brokers (see below).

Royal & SunAlliance's Brendan McManus also made encouraging noises on this issue in the last quarter, saying that "We hope that our resolve in maintaining ratings at the current level will be followed by our major competitors." And it would seem, given the market-share control between NU and RSA, that major insurers are serious about staving off the client-confidence-damaging boom and bust market cycles of recent years. So, without sounding glib, brokers ought to be able to say with greater confidence that the new year has brought a few things worth being positive about.