The FSA may look to make an example of firms not meeting the regulatory requirements in the period immediately following the start of regulation, warned Deloitte.
The professional services firm said once regulation came into force, areas such as complaints handling would need greater attention.
It warned that the FSA was likely to use complaints as a barometer for whether businesses required closer scrutiny.
Deloitte warned that the start of regulation would also have major implications for call centres.
“At the very least, average call length will increase, which will reduce the number of calls fielded, as operators become obliged to provide a series of cautions and disclaimers when providing advice and recommendations.
“Call centre-based businesses will need to ensure they have the resources to accommodate the increased effect of longer call lengths and need to consider the potential impacts on customers.
”Call centres also need to ensure that their staff understand the point at which providing information becomes offering advice,” warned the company.
Deloitte financial services partner Colin Rawlings said: “Many insurance intermediaries are not aware of the full ramifications of regulation. With only a few months to go, it is vital that they start gearing up for compliance, implementing a structured plan to meet the demands that regulation presents.
“Intermediaries should not lose sight of the potential business opportunities that may emerge, as some businesses opt out of certain lines rather than face the effort and expense involved in achieving compliance.
“Firms should start considering how to respond to the resulting rationalisation, whether to move up or down the distribution channels, or even sideways.”
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