Survey shows industry wants an urgent review of regulations to determine benefits
The FSA is failing to benefit the end customer and is simply leading to an ever-growing paper mountain. That is the view of the majority of brokers in a survey conducted on behalf of the CII.
On the anniversary of statutory regulation, the broker market lambasted the FSA for increased bureaucracy and paperwork without any discernable benefit to the consumer.
They called for an urgent review to determine the benefits to consumers of regulation.
In a survey examining insurers' and brokers' attitudes to various industry issues, 77% of brokers said it was "hard to see how FSA regulation was benefiting the end customer". Nearly half (49%) strongly agreed with the suggestion.
And 73% said an "urgent" review among customers was needed to ascertain the benefits to them of FSA regulation.
Additionally, 87% of brokers said the main impact of FSA regulation "was an increase in the volume of paperwork they receive".
One broker involved in the survey commented: "All they [the FSA] have done is create a bureaucracy and we know that a bureaucracy is not always the best thing for the client and the customer.
"Too much bureaucracy, too little common sense, too little simplicity."
He added: "Is the client more protected under FSA rules than he was before? I would say not."
An FSA spokesman said its effectiveness review commencing in April will examine whether consumer benefits have been achieved. "The anecdotal evidence from consumer bodies is that there have been some benefits."
He added: "Having had to impose regulation, we try to do it in a way that is least burdensome to firms."
Other important issues highlighted by brokers in the survey included: the insurance cycle, treating customers fairly and transparency.