Understanding FSA
About FSA
The FSA authorises and regulates all insurers and insurance intermediaries in the UK and has rules governing the sales, administration, claims and marketing of all insurance in the UK.
The rules governing general insurance mediation are laid out in the FSA 'Insurance Conduct of Business' (ICOB) sourcebook.
Who are the FSA?
The Financial Services Authority is the organisation set up by government under the Financial Services Markets Act 2000 (FSMA) to regulate firms that undertakes financial services in the UK.
It is an independent, non-governmental body.
The staff of the FSA have been drawn from a variety of backgrounds. Many had careers in the mortgage and general insurance industry before joining the FSA and worked for one of the former regulatory bodies such as GISC.
Objectives of the FSA
The FSA has four key objectives:
- Maintain confidence in the UK financial system. FSA supervises individual firms to ensure that their management behaves with integrity and treats customers fairly.
- Promote public understanding of the financial system. FSA helps people become better informed so that they can manage their finances more effectively.
- Secure the right level of protection for consumers. FSA requires firms and individuals to meet standards of honesty and competency and are ready to act if firms fail to meet standards.
- Reduce the potential for financial services firms to be used for financial crimes. FSA acts on money laundering, fraud and dishonesty.
FSA Implications on Sales
The purpose of the FSA rules on the sale of general insurance is three fold:
- To ensure that customers are treated fairly.
- To ensure that customers demands and needs are being taken into account when they are sold insurance (and whether a contract continues to meet their needs at renewal).
- To ensure that customers have all the information necessary to make an informed choice of what product to buy.
