The FSA has warned insurance companies and brokers that they face enforcement action unless they make “significant progress” in implementing the regulator's Treating Customers Fairly (TCF) initiative.
Sarah Wilson, the FSA director responsible for TCF, said that while progress was being made in implementing the principles there was still “much to be done”.
“Many firms are making significant progress. They are doing so in a variety of ways and we see examples of very good practice. Unfortunately, others are still at the beginning and have a long way to go – to them there is a warning: you are increasingly being left behind by competitors who are finding commercial advantage in putting consumers at the heart of their business.”
She added: “You will also find that the FSA has less and less patience with inactivity and starts to consider greater use of enforcement action.
Wilson said this would particularly be the case where a firm had failed to identify shortcomings which lead to consumer detriment, has not developed a strategy to remedy them and has committed a serious breach of the principle, “whether or not there has been a breach of a detailed rule”.
She continued: “Thematic work showing poor compliance with disclosure rules, poor sales practices for some products etc at the very least suggests that senior management good intentions are not always being translated into an appropriate attitude on the ground. They may also suggest that more difficult work remains to be done – for example in the area of remuneration, where a firm's approach might be at variance with what it professes itself keen to achieve”.
Wilson added: “It is good to see an increasing number of firms move across to the implementation stage [of TCF]. However, we take the view that very few can as yet be expected to be embedding and this will probably continue to be the case in July when we next report survey results.”
