A form of co-mingling is proposed
The FSA is to offer the industry one proposition in its re-consultation on client money.
Speaking to Insurance Times after her speech at the Biba conference, FSA director of high street firms Sarah Wilson said that the proposed model would be a form of co-mingling with a more structured framework.
Wilson said that the FSA had considered the model put forward by Biba of a hybrid trust account, and had also undertaken its own work.
She also said that a date had yet to be set for the implementation of any new rules. "It could be January 2006, or it could be earlier. It may form part of the consultation."
Earlier, in her conference speech, Wilson said that the consultation paper would be published in late July. She said that a final decision would be made in early 2005 on whether to change the rules.
The FSA would not be making risk transfer mandatory, she added.
Wilson also warned insurers of the need to clarify their terms of business agreements with brokers. "It is unreasonable for insurers not to be looking at agency agreements just because of re-consultation," she said. "There is enough information from the FSA for insurers to be able to clarify their documentation."
The decision to re-consult was met with enthusiasm across the industry. Gale and Phillipson corporate manager David Raw said: "It is very welcome. It shows that the FSA is listening to the industry."
Biba regulation and compliance manager Steve White said: "This is the first hurdle. The industry now needs to act collectively to move the issue forward."