FSA rules checked as brokers complain of burdensome regime
The ABI is conducting research into whether the FSA's conduct of business (ICOB) rules are working.
The ICOB rules cover areas such as the provision of policy summaries and the disclosure of product information pre-contract.
ABI head of market regulation Chris Hannant said the organisation was expected to conclude its work by the end of the year, and will present its findings to the FSA.
"We want to make sure the rules are fit for purpose in the long-term.
"We are looking to see if there are any unintended consequences and will make recommendations to the FSA on improvement."
The move follows criticisms from across the insurance industry that the ICOB rules are too burdensome on companies and do not achieve some of the consumer protection objectives intended.
Brokers and insurers have complained of policy summaries of over 20 pages in some cases, while the additional information required in telephone sales is adding minutes to calls (see box)
Royal & SunAlliance personal lines director Adrian Brown said that in many instances consumers are not reading the policy summaries or listening to the recorded disclosure messages.
"In this case is regulation achieving what it wants to do?"
Brown said the industry needed to do something to address this issue.
Hannant said that call lengths were a particular focus. "We are looking at what customers want from calls and whether the calls are too long.
"The anecdotal evidence is that calls are longer but more regimented."
An FSA spokesman said it was "sensible" to look at the effectiveness of the rules.
Five minutes added to phone calls
Call lengths have increased by as much as 25% as a result of FSA regulation, according to management consultancy Impact Plus.
Andy Jones, a manager at the company, said its work with one client had found regulatory requirements had added up to five minutes to call times, which increased firms' costs.
In the case of one company, he said, an extra 50 staff were required.
Jones said that some companies were over-implementing the rules for fear of being non-compliant. "It would be extremely helpful if the FSA gave some guidance," he said.
