The proposed FSA regulation appears fundamentally flawed in that it fails to address the wider issue of how the UK insurance industry needs to adapt in a changing world in which we are outsourcing the creation of wealth and rapidly becoming a consumer oriented society.

We all have our own perspective and, apart from the present debate about "risk transfer" and the requirement of the Insurance Companies Act for authorised insurers to restrict their business to insurance. It will be found on reading the FSA High Street Firms application pack that it fails to define insurance, a fact that ignores the first rule of problem solving, namely to make sure the parameters of the problem are clearly understood.

Accepting 1946 as our norm, where then have we gone wrong? How do we define insurance and where does the balance lie between the "needs must" of insurers and the fundamental bilateral principle of utmost good faith for existing contracts?

More especially, unlike the legal profession, insurance brokers do not enjoy the protection of special pleading and are required to put the interests of the insured before all other considerations, but without being unfair to insurers

John Lynch
Insurance Advisory Service

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