Regulator to review insurance companies' success in detecting financial crime

The general insurance industry could be brought within the scope of the FSA's money laundering rules.At present, general insurers are exempt from these rules.But the regulator is currently reviewing the extent to which the general insurance industry is successful at detecting money laundering and other forms of financial crime.An FSA spokeswoman said: "If the outcome is that the general insurance industry is not good at detecting crime, we will be looking at ways of tackling it."She confirmed that this could mean extending the money laundering rules to the general insurance sector. Insiders predict that a consultation paper could be issued on the subject next year. The FSA is currently seeking feedback from law enforcement agencies on the extent to which money laundering is an issue for the industry. The FSA said it would begin dialogue with the insurers after the publication of the report in February 2005.Insiders said that the regulator was also recruiting a team of financial crime experts.Its remit would be to investigate the existence of money laundering and other criminal activities in the general insurance sector.The move is part of a global crackdown on financial crime, spearheaded by the financial action task force. The task force is an inter-governmental organisation charged with preventing financial crime. Its members include the financial services regulators from around the world, including the FSA.

Secret role for ex-Lloyd's manFinancial crime specialist John Baker has been appointed to a "confidential role" at the FSA.The former Lloyd's compliance officer will join the financial crime reform division of the FSA. An FSA spokeswoman said his remit was "confidential".Sources suggested that Baker's appointment will assist the FSA in understanding the Lloyd's market. Recently the FSA lost London market expert David Russell to Lloyd's.