Brokers are set to lobby the FSA for clarity on risk transfer and the treatment of insurer monies
Brokers have slammed the FSA for its "lack of clarity and leadership" in the final rules, published last week.
They are now set to lobby the FSA over the coming months.
In the final rules, the FSA gave brokers a one-year period of grace on the co-mingling of client and insurer monies. The two monies can be held in the same account until January 2006, pending further work by the FSA.
The FSA also left the issue of risk transfer in the hands of insurers, specifying only that binding authorities would effect risk transfer.
Brokers have criticised the regulator for "running away" from risk transfer and for leaving uncertainties in the treatment of insurer monies.
The Broker Network chief executive Grant Ellis said the rules were over-complicated and created a regime that was "bizarre and inconsistent".
"The FSA says there is automatic risk transfer where a broker can bind an insurer, so this will apply to brokers issuing cover notes. But a broker may also have an agency with the same insurer to sell other products, such as household. Here there may be no risk transfer."
Ellis called on the FSA to remove the inconsistency, making risk transfer dependent solely on the terms of agency agreements.
Stuart Alexander compliance manager Dick Tucker said: "There is no clarity on risk transfer, and the FSA has not said what will happen to insurer monies [after the grace period]. If co-mingling is not allowed brokers may have to set up lots of different accounts for insurer monies."
Biba said it would lobby the FSA.
