Having read both the article by Tony Cornell (`If it ain't broke', 7 March, Insurance Times) and the more recent one by Angela Darling (`The future of regulation', 14 March, Insurance Times), I am writing to support the sentiments expressed by Angela Darling. Especially the observation that the General Insurance Standards Council (GISC) is not the problem, but the solution.
I have been working in the insurance/assurance industry for the last 37 years, the last 27 as a management and regulation consultant.
Much of my current work involves me in conducting benchmarking healthchecks of GISC members, often ahead of the official GISC monitoring teams.
As a result of my experiences, several things are now clear to me:
1 It does not take a crystal ball to anticipate what the Financial Services Authority (FSA) will expect from general insurance insurers and intermediaries when they ask for applications in two years' time. A visit to the FSA website will allow you to inspect its current application documents and guide notes - around 400 pages in total, but with a very clear indication of the type of information that will be required and, as Angela Darling points out, you will also need full evidence to support the answers that you provide to the FSA.
The FSA have already stated they will give "due credit" to those who voluntarily embrace regulation. It goes without saying that those who don't will have a real challenge on their hands when they sit down to complete the application forms.
2. It is not sufficient just to join the GISC. Members also need to recognise that GISC membership, as with all regulation, is a way of life. You cannot bolt regulation on; you have to build it in to your organisation.
Paradoxically, it is often the small high street intermediary that takes the whole matter seriously and seeks, at considerable expense, to put regulation in place and make it work, while the big boys are paying what amounts to lip-service to their GISC membership.
If proof is needed of my last comment then I can do no better than to share the highlights of my recent first hand experience with Norwich Union (NU).
Judge for yourself:
When I stated to one individual that it was a breach of GISC rules not to advise me how to make a claim and also not to have competent staff handling customer inquiries there was silence. When I added that because of these breaches I was making an official complaint I was met with even stonier silence.
I could go on with other similar experiences, but it is probably unfair to single out NU.
My point is that just sticking the words "Member of the General Insurance Standards Council" on your letterhead, compliment slips, fax-header and email cover is not enough. Members have to take the rulebook off the shelf, blow the dust off it and open it up and read it.
Performance Improvement International