The insurance industry has hit its contract certainty targets, the FSA has announced.
The FSA made the statement today following a meeting with insurance industry leaders in which the industry reported that 90% of contracts in the subscription market and 88% in the non-subscription market are now achieving contract certainty.
In December 2004 FSA chief executive John Tiner challenged the insurance industry to end the 'deal now, detail later' practice in the UK, giving it two years to find an industry solution or face regulatory intervention.
Tiner said: "This is a major achievement by the UK insurance industry. Through their concerted hard work they have addressed an issue here in the UK that affects insurance globally. It will serve as a catalyst for the ongoing wider reform of the industry and will further raise the competitiveness of the UK industry."
He added that the industry's achievement endorsed the "market-based solutions" model he advocated.
"A market failure has been largely fixed by the industry without a single new rule being introduced," he said.
Contract certainty will continue to be a supervisory priority in 2007 and the FSA will consider regulatory action to address any shorfalls by insurers and brokers in actioning contract certainty rules.