By Christine Seib

The General Insurance Standards Council (GISC) has dropped Rule F42 and its board elections, following the 12 December announcement that regulation would be transferred to the Financial Services Authority (FSA).

Insurance Times warned of the move on 25 October and was the first publication to pre-empt last Wednesday's announcement by the Treasury.

Rule F42 would have allowed insurers to deal only with GISC-member intermediaries.

The GISC had planned to apply to the Office of Fair Trading (OFT) to exempt Rule F42 from the Competition Act.

However, GISC chairman Anthony Howland Jackson said Rule F42 was no longer needed "since statutory regulation will, by its nature, achieve this objective".

The GISC planned to announce nominations and elections to its board by the end of the year.

It has now decided the elections would be inappropriate, since the board's responsibilities would eventually be transferred to the FSA.

Howland Jackson said the GISC did not expect the FSA to take over regulation for at least two years, during which time the GISC would focus on providing an effective interim regulatory regime.

"It's particularly important we ensure our members are in the best possible position to apply for authorisation under the FSA," he said.