In December 2004, the FSA challenged the UK insurance industry to achieve contract certainty within two years and the drive continues to move forward.
The importance of customer service to a well ordered business can never be underestimated.
That is why the FSA has put its weight behind such issues as contract certainty and why the industry has responded so efficiently in meeting its demands.
Gone are the days of contracts remaining uncertain for months, maybe even years, the industry has stood to attention, got back to basics and started to issue significant proportions of its contracts within a set timetable.
In January, the FSA announced that the insurance industry has hit those targets, with 90% of contracts in the subscription market and 88% in the non-subscription market now achieving contract certainty.
The two year industry drive to end the 'deal now, detail later' practice in the UK, has proved successful and shows the market is more than capable of responding to the threat of regulatory action and recognising its inefficiencies.
FSA chief executive, John Tiner, said at the beginning of the year: "This is a major achievement by the UK insurance industry. Through their concerted hard work they have addressed an issue here in the UK that affects insurance globally. It will serve as a catalyst for the ongoing wider reform of the industry and will further raise the competitiveness of the UK industry."
““The UK will benefit enormously from further modernisation of the insurance industry and contract certainty is an important part of that process. Ultimately, it is our customers that reap the benefits, and it therefore must remain a key priority.”
Dane Douetil, chairman of CCSC and the London Market Reform Group (MRG)
Spurred on by the success of a “market-based solution”, the work to ensure policies continue to be fully agreed prior to coverage becoming active shows no signs of relenting.
The publication of a code of practice by the Contract Certainty Steering Committee (CCSC), the cross market group of CEOs which provides the FSA with a top level interface to the whole UK insurance in relation to contract certainty, only goes to reaffirm the industry’s commitment to maintaining its momentum.
The document, which is the first ever from a UK market body to cover both the subscription and non-subscription insurance markets, brings together all contract certainty guidance issued over the last two years; modifies the definition of contract certainty; outlines a series of contract certainty principles; and requires firms to demonstrate performance.
In short, it is a code by the industry, for the industry, and ensures it continues to abide by the practice of achieving contract certainty.
Dane Douetil, chairman of CCSC and the London Market Reform Group (MRG), summed it up when he said: “The UK will benefit enormously from further modernisation of the insurance industry and contract certainty is an important part of that process. Ultimately, it is our customers that reap the benefits, and it therefore must remain a key priority.”
The Contract Certainty Steering Committee
The Contract Certainty Steering Committee is a cross market group of CEOs which provides the FSA with a top level interface to the whole UK insurance industry – insurers, brokers and customers – in relation to contract certainty. It includes representatives from the Market Reform Group (MRG), the London Market Insurance Brokers’ Committee (LMBC), the Association of Insurance and Risk Managers (AIRMIC) and the non-subscription market.
- PDF, Size 89.73 kb