The FSA will launch a review of its own effectiveness in April 2006.
The news comes as brokers speaking at the CII conference agreed regulation would eventually have positive implications for the industry. In the short term, however, there could be some detrimental results.
Mark Cliff, AXA distribution director, said: "Brokers need help on the FSA. Once the FSA has done its checks [on independent brokers] it's not going to be about checking your action plan, it's going to be about whether you are still in business."
The FSA will drive personal lines business away from brokers and into the hands of direct writers, said Alec Finch, group director of Alec Finch Group.
He added: "The FSA won't make us more professional, I don't think it will even have an impact on non-professional brokers either."
Over-regulation"will stifle the life out of our industry," he said.
The FSA plans to show its own effectiveness through an internal review conducted not by an independent body, but by the regulator itself.
"The review will take into account our determination to find ways in which we can improve the effectiveness of our regulation and can contribute to the better regulation agenda," Clive Briault, FSA managing director of retail markets, told CII delegates.
The review will encourage feedback from the newly regulated companies.
It will also attempt to gain some insight into whether the client is reaping the rewards of a regulatory regime.
The FSA said the review would be conducted as thematic visits continue.
