Latecomers will be denied trading rights

Brokers and intermediaries have been warned that they must get their FSA applications in on time to continue trading.

FSA director of high street firms division Sarah Wilson issued the warning at both the Association of Medical Insurance Intermediaries (AMII) conference and the Biba Scottish regional conference last week.

Wilson said regulation would start in October 2004, depending on when the EU Directive came into force.

"We will publish the final rules in the second half of 2003 and encourage you to get your applications in as timely and as completely as possible," she said.

Wilson confirmed that the FSA was expecting a large number of firms to apply for authorisation and only with this authorisation could the firms trade legally.

In her talk at the AMII conference, Wilson labelled health insurance a "high risk" product, "because it is a complex insurance and the terminology is difficult for consumers to understand".

She added: "The overall objective of regulation is to design a risk-based regulation regime which is sensitive to the risk in the market for insurance products."

Wilson admitted that health insurance had "complications".

"We have to take account of the fact that the immediate customer can be a medical intermediary, but the policies are seen to be sold to a private customer. One size will not fit all," she said.

MediQuote Business development director Mark Kimberling said that he was pleased with this observation and the FSA's verbal commitment to one-man IFAs.

"Wilson acknowledged that there could be different requirements for IFAs compared with other intermediaries," he said.

AMII chairman Larry Bulmer said regulation was "a fantastically hot topic" and said Wilson's presentation was "helpful".