The FSA should impose higher standards on insurers to meet the needs of run-off, according to the head of the UK's largest run-off company.
The FSA should impose higher standards on insurers to meet the needs of run-off, according to the head of the UK's largest run-off company.
CX Re chief executive Philip Singer, speaking at an Insurance Institute of London lecture, criticised the systems and records of insurance companies. He said that the quality was too low to permit the transition from continued to discontinued business.
"Systems need to be upgraded and records have to be cleaned up or completed. Records are often kept at the level of the broker rather than at the level of the insured, so you cannot identify debtors and creditors.
"The FSA should require companies to have systems and records capable of meeting the needs of run-off."
But others have questioned whether an FSA-driven approach is the most appropriate.
Philip Holden, director of run-off specialist LCL Group, said: "Companies don't set themselves up with the intention of going into run-off. Migration of data is a problem, but is very much company specific and depends on the needs of the run-off. An industry wide approach would be difficult and give rise to problems."
Holden advocates a "consolidated broker" approach, whereby one broker is appointed and is responsible for extracting data from other brokers.
