UK loss adjusters fear that French regulators will insist on direct regulation and so create trade barriers
Cila will study the French interpretation of the EU Insurance Mediation Directive (IMD) following concerns that France may seek its own regulation of loss adjusters.
If the French regulators insist on loss adjusters being directly regulated, UK loss adjusters, who are not regulated, would have one set of rules for UK and one for French operations.
A Cila spokesman confirmed this week that it was set to examine a translation of the French interpretation of the Directive to clear up any confusion.
"It would be strange if two of the major players in the EU had interpretations which are totally at variance," the spokesman said.
"If a UK loss adjuster was dealing with a French principal counterparty it would have to comply with the French interpretation of the EU Directive."
UK loss adjusters fear that if the French decide to directly regulate adjusters it could give rise to restraint of trade affecting UK adjusters operating in France.
A source said: "If the French interpretation of the Directive says that loss adjusters will be regulated directly, UK loss adjusters that operate in France without adhering to the French rules could be barred from trading."
The FSA has already made clear its position that it will not directly regulate loss adjusters working for insurers.
But many UK loss adjusters said they would prefer directly regulationd by the FSA because they claimed it would ensure greater confidentiality.
"Many adjusting firms have said they would prefer to be regulated directly as they would want to be more confidential with sharing information such as accounts," the source said.
An FSA spokeswoman said the UK's interpretation of the Directive was the responsibility of theTreasury.
"The Treasury takes the IMD and implements this into UK legislation and the Treasury gave us responsibility for regulation," she said.
