Insurers hit back over alleged 'lax' attitude to policies
The FSA has attacked the London market for its slow production of policy documents.
Speaking at a seminar last week, FSA high street firms division manager David Russell said the FSA wanted "significant improvements" in this area. "The market has been lax in these areas and needs to raise its standards."
Russell was referring to the fact that policies are often incepted without complete policy documentation.
Insurers and brokers responded angrily to the comments.
Lloyd's insurer Cathedral Underwriting chairman Elvin Patrick said: "One can understand a regulatory model that can't understand a policy incepting before a contract is concluded.
"But if the FSA makes it a compliance breach not to have a wording in place, it will be chaos. For example, if you insure a fleet of ships, the policy is constantly changing. How would that work?"
Holman Insurance chief executive Andrew Holman said: "The comments show the FSA's ignorance of the London market.
"It's not helpful and won't instil people with confidence in its ability as a regulator. The FSA is used to dealing with banking where things are more straightforward, but the subscription market is much more complicated.
"Everyone in the market wants to speed up the processes. It has already made huge steps forward with initiatives such as the London Market Principles which, when in place, will make a huge difference."
He said: "Although a third of plans had to be re-submitted due to technical issues, 42% of plans created major validation problems."