Do You Need to Apply for FSA Authorisation by 13 July 2004? A Surprising Range of Businesses Do.

Consumer insurance products have become a lucrative source of income for service providers and retailers with customers now able to purchase insurance from supermarkets, travel agents, motor dealers and other High Street retailers. This popularity has attracted the attention of Government, which is now seeking to regulate the activity and ensure customers are properly protected.

From 14 January 2005 the Financial Services Authority (FSA) will assume regulatory control over the sale of general insurance (what the FSA refers to as N(GI)). This means service providers and retailers whose insurance activities are a side-line to their main business, including anyone involved in promoting or selling insurance such as supermarkets, banks, travel agents, motor dealers, estate agents, and utility companies, will have to meet FSA standards if they wish to continue with these activities.

If a business arranges or advises on general insurance, for example vets, solicitors, doctors and accountants it will need to be authorised by the FSA or to have been specifically exempted from authorisation. So N(GI) affects companies and firms outside, as well as within, the mainstream insurance industry. Companies dealing in insurance, in any shape or form, must be fully compliant with the Insurance Conduct of Business and other rules by 14 January 2005. The practical deadline for applications to the FSA for authorisation is 13 July 2004 so there's less than a month to seek regulatory approval.

Our experience

Pinsents is currently advising a wide variety of clients on many aspects of N(GI):

Is authorisation needed? - "Perimeter Guidance"

who needs authorisation and for which activities?

activities of overseas call centres

the "by way of business" test

exclusions including the exclusion for connected warranty contracts

exemptions including the professional firms exemption

drafting/amending contracts with parties who will need authorisation

providing restructuring solutions

Appointed Representatives (ARs)

multiple principal agreements

introducers and introducer Ars

The Insurance Conduct of Business Rules

to which contracts/customers do they apply?

submissions to the FSA on behalf of retailers in respect of warranties

tacit renewals

distance contracts and the Distance Marketing Directive

Prudential requirements

risk transfer - advice for submission to FSA by insurance brokers

client money rules

compensation: FSCS

Pinsents is one of...

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