The FSA has rejected brokers' calls for compulsory risk transfer of client monies to insurers.
In its policy statement, published today, containing the near-final rules on the proposals consulted on in CP174 Prudential and other requirements for
mortgage firms and insurance intermediaries, the FSA said that compulsory risk transfer "does not offer a way forward".
The paper referred to the "strong opposition" from insurers and "scepticism" from the larger insurers on the subject.
"While we think it could work in practice in relation to more straightforward parts of the market (perhaps most retail business and some simple commercial) we have reservations about the proportionality of this approach and its long-term market effects".
