OFT APPROVES RULES OF GENERAL INSURANCE STANDARDS COUNCIL

Rules designed to improve standards in the UK general insurance industry have been given the green light by the Office of Fair Trading (OFT). The rules of the General Insurance Standards Council (GISC) do not infringe competition law, the OFT said. The rules were referred to the OFT for a decision on whether they infringed the Chapter 1 prohibition of the Competition Act 1998. The GISC is a self-regulatory body for general insurance, which began accepting members on July 3. 2000. Its rules include a General Insurance Code for private customers and a Commercial Code setting out the minimum standards of service which customers can expect. The rules aim to ensure that members are competent to carry on general insurance activities and put in place safeguards to protect consumers. OFT director-general John Vickers said that “when people buy general insurance they need to have confidence in those selling the products. Self-regulation can protect consumers and give this confidence, but it must not be allowed to restrict or distort competition and drive up prices. I am satisfied that GISC’s rules are unlikely to have this adverse effect”.