Regulation of intermediaries

Non-life business

The Treasury published, in October 2001, a consultation document on the regulation of the activities of intermediaries in general insurance business. There are two key influences on the proposals put out for consultation. The first is the failure of the General Insurance Standards Council to clear competition law hurdles in its attempt to ensure effective self-regulation. The second is the EC’s draft Insurance Mediation Directive, which imposes regulatory obligations on Member States in order to protect policyholders in the single market. The changes will be made by a combination of statutory instruments and amendments to the rules of the Financial Services Authority, and should take effect by October 2004. The Directive applies to long-term and general business alike, although the Treasury is satisfied that the present regulatory regime for life business, under the Financial Services and Markets Act 2000, satisfies the requirements of the Directive so that no further action is needed in that sector.