John Jackson fears the regulator and reinsurance rates will hit them where it hurts in 2006

If you are still basking in the glow of the recent festive season I am sorry to start off the New Year on a sour note. I don't know what Old Moore's Almanac has to say about January, but my view is that it will not be the best month of the year for brokers.

For those few brokers who escaped the Stalinist zeal of the FSA in its first year of operation, the next 12 months should change all that, starting with this month.

Compulsory commission disclosure could be much closer at the end of this year, following the FSA's 'Dear CEO' letter to brokers on conflict of interest.

This is a complete U-turn by the FSA, which last spring was making very different noises on disclosure. The FSA does not merely move the goalposts - it transports the entire pitch.

Probably the FSA's most offensive "initiative" is what it impertinently calls Treating Customers Fairly. Brokers are rightly incensed. After all, they have not only survived, but prospered in the high streets since time immemorial, by providing good customer service.

Regulation problems apart, reinsurance rates this year are likely to impact across most classes of business, so some premiums may rise. Motor and household as well as commercial classes could find 2006 a tough year.

But the market should heed the wise words of the Lloyd's chairman Lord Levene: "There must be no letting up on the current focus on financial performance. Pricing must reflect risk and exposure."

Amen to that.

Lloyd's has lifted its game with increased capacity for 2006 of £14.7bn, timely in view of the expected 2005 losses largely due to the appalling run of natural disasters. One big question mark for the London market is whether business will drift offshore. If it does, blame the FSA. Successful businesses prefer a light regulatory touch to the sledgehammer.

One bright spot on the calendar for 2006 is what, at long last, seems to be a serious attempt all round, from government, the police and the insurance industry, to tackle fraud.

Various reports on fraud are due, including the government's Fraud Bill, this month's expected Law Commission study on insurance contract law reform, an ABI/City of London police inquiry - due to report in May - and a Treasury study likely to be published in April. Then there is the embryonic Insurance Fraud Bureau and a fraud database.

If there is no action after this lot, then heaven help us all. Sensibly, Norwich Union has called for a national fraud strategy, an idea well worth pursuing.

Next month Department for Constitutional Affairs/Advertising Standards Authority research into advertising on personal injury compensation claims is due. Meanwhile, the Compensation Bill has been given industry raspberries all round.

So, if you can ride out January, then maybe the next 11 months won't be quite so bad.

Unless, of course, you get an 'arrow' visit from the FSA. IT