NU has issued a compliance ultimatum to its brokers. How long before other insurers follow suit, asks Andy Cook

The phoney war is over. After a year of prevarication and procrastination, the FSA rulebook on the sales of insurance is nearly complete and insurers are beginning to take an interest in the practical measures that their trading partners are taking to ensure compliance.

With the FSA requesting applications by next July and the directive coming into force in January 2005, it is no wonder that insurers are carefully who they will be doing business with next year.

Norwich Union (NU) has taken a strong lead. It has given its brokers, and that means most brokers in the industry, until the end of the year. By that time, it wants to know whether the plan is to sell up or continue trading. If it is the latter, it wants to see evidence of planning for compliance.

For months, many have been pinning their hopes on GISC compliance and the FSA has indicated that GISC compliance is a fair step on the path to FSA compliance. Most of what you need to know has been published in CP187. So, the argument goes, you should be able analyse what else you will need to do and put some plans in place to make up the difference.

The problem is, of course, that clarifications on approved persons and risk transfer will not be published until next month. These are business critical and will prevent many from really making much progress with planning for compliance. This means that the future of hundreds, if not thousands of brokers, will be decided in the ten weeks leading up to Christmas. Add this to the usual rigmarole of chasing up renewals for 1 January and the prospect is that many people could make poor, tired decisions that are in no-one's favour.