Searchlight Letter of the month

The Financial Services Authority noted with interest the findings of the Professional Broking Sentiment Survey concentrating on general insurance regulation. We welcome feedback of this kind, which helps us focus on improving regulation.

While we cannot change a great deal of the overall regulatory requirements, because they are based on European directives, we can and do work to lessen their impact, particularly for small brokers, and to make real the benefits that regulation can bring both to the industry and to consumers.

The FSA has taken a number of practical steps to help firms to adapt to the new general insurance regulation and has introduced a number of innovations designed to make regulation easier for firms to understand and implement. These include a tailored handbook for insurance brokers, a call centre dedicated to help small firms, a consolidated single-fee invoice for firms to replace the three separate invoices from the FSA and the Financial Ombudsman Service and Financial Services Compensation Scheme levies, and payment of fees by instalment.

We produce fact sheets on the findings of our general insurance project work that point out clearly what is good and bad practice in the industry.

Our newsletters draw attention to the latest regulation updates and targeted information for the sector. Our roadshows present our work, and training courses and workshops are also available on specific knowledge areas. In addition, our Better Regulation initiative work aims to deliver regulation that meets our statutory objectives in a way that is as risk-based and cost-sensitive as possible.

We support the government's better regulation agenda, which corresponds with our pre-existing commitments and the work we have been doing for some time in this area.

We aim to ensure high standards within the insurance industry and believe that the great majority of firms are working hard to maintain these standards and will not tolerate those firms who bring a bad image to the industry.

The effectiveness review of general insurance regulation will get under way from April 2006 and will focus on improving our retail conduct-of-business requirements. It will take into account our determination to find ways in which we can improve the effectiveness of our regulation and contribute to the better regulation agenda.

Andrew Honey

Head of insurance, Small firms division,

Financial Services Authority.