FSA reluctant to intervene in contract certainty

David Strachan, Insurance Sector Leader at the Financial Services Authority, recently updated the market on the FSA’s view of contract certainty. He said the market had come far, one year into the two-year challenge, but said there was more work to do at the coalface. The FSA is waiting for market data following 1 January renewals to help make its decision on whether to use regulatory intervention or be satisfied with the market’s progress. Visits to companies at the end of last year threw up a number of issues that Mr Strachan addressed in turn during his lecture to the Old Library at Lloyd’s.

Under the admirable leadership of Nick Prettejohn’s Steering Group, the working groups for the subscription and non-subscription markets have brought considerable energy and effort to bear on finding solutions. A definition of contract certainty, agreed by all parties last summer, is now being implemented through market codes, supplemented with guidance, FAQs and industry presentations. In addition, the CII has made great efforts to increase the skills and competency of individuals operating in the market, launching in October last year the Contract Certainty Certificate and Commercial Insurance contract wording exam.