Branko Bjelobaba warns that the FSA will be out to get those not authorised from tomorrow
D- day is tomorrow. Unless you have been living outside of the UK you will know that the FSA will start regulation of the general insurance sector tomorrow.
We've known about what will be happening for the past two years now, but hand on heart - do you know what you now need to do to be compliant?
Having done a number of talks I am still astounded by the basic level of some questions on issues that should and must be resolved now to avoid unwelcome attention from the FSA.
Recent figures from the FSA show that more than 10,000 firms have applied for authorisation but several thousand have asked for application packs and have yet to return them.
Unless you are contemplating premature retirement, fill in and return the paperwork now. After tomorrow, firms will face Part IV application packs which for sole traders weigh in at 79 pages and this will incur a processing fee of £1,500 for a 'straightforward' application.
The FSA has also issued a warning to hotspots those in the motor trade, property manager and removal sectors.
Sarah Wilson, the FSA's director of high street firms division, has said: "We are extremely concerned to see that despite our ongoing correspondence and work with these sectors, there are still firms who have not applied or become appointed representatives (ARs).
"We urge these firms to take action now and contact us."
The FSA has also stated: "One of our first priorities after NGI Day will be to crack down on operators who try to carry on general insurance business without authorisation." You have been warned.
The FSA will not be like GISC where a visit 'could' have taken place, but in fact firms may well have been left alone.
The FSA has made it clear that many firms will not have an 'active' relationship with the FSA but, at least twice a year authorised firms will have to send in a report.
Firms should now prepare for the collation and submission of the retail mediation activities return.
You will need to know what that is and what data you will need to collate from 1 April for submission from 1 July in line with your year end and at six-monthly intervals.
Data is expected in respect of:
Find out what you need to do and when you need to send it in.
Some software houses have already made it clear that their systems will only be able to deal with less than 30% of those data requirements - the rest is down to you.
The FSA has stated: "Well run firms should find it relatively straightforward to comply with our regime. However, we expect firms' senior management to take particular responsibility by: undertaking and implementing the standards of business practice we expect."
Ignorance is not bliss. When at PricewaterhouseCoopers, I audited around 400 firms and found 390 wanting in some way.
On countless occasions I saw the GISC rulebook emerge from the sealed envelope in which it had been sent in - it had not even been opened.
So please do not be complacent - the FSA is very different to GISC and you risk severe regulatory attention if you don't comply.
My final words must go to GISC, which was an essential pathfinder and a bright light for those who wanted to 'try out' real regulation.
We will never again see a 44-page rule book or regulators willing to answer questions in a straightforward manner.
The industry will miss GISC. Good luck dear friends. IT
' Branko Bjelobaba is director of Branko