Rules barring members of the General Insurance Standards Council from doing business with non-members are another step nearer implementation.

The so-called “Rule F.42” – omitted when the bulk of the regulations was drawn up – will be submitted to the Office of Fair Trading and GISC hopes it will be in force by next March.

“The purpose is to complete the chain down the distribution channel, from the insurers through one or more intermediaries, to the policyholder,” said the GISC's Catherine Nicoll.

Under the rule, GISC members must not deal directly with a non-member, and must ensure that their interme-diaries, agents and sub-agents do not deal with non-members.

Nicoll said that, while it was usually clear whether the insurer was a GISC member, it was not always the case with those who were hidden from view.

“This gives policyholders the protection they want, by knowing they're dealing with a GISC member,” she said.

The implementation of the rule in 2001 is timed to coincide with the repeal of the Insurance Brokers Regulatory Act, and also with plans of the Association of British Insurers to cease operating its code for tied agents.

However, there is still no obligation for anyone in the industry to join the GISC.

Nicoll said she believed this would not be a major problem, because of consumer pressure.

“If they felt they were losing market share, it might encourage them to come in. Only the smaller ones will stay out,” she said.

While the principles of the regulatory regime have been agreed, GISC said it was still inviting comment on precise wording.