A major consultation is under way which could rein in the FCA
By Content Director Saxon East
It wasn’t so long ago that there was talk of a post-Brexit UK becoming ‘Singapore-on-Thames’.
A freewheeling, low tax, deregulated economy on the European Union’s (EU) doorstep.
Instead, the opposite is happening.
Hyperactive FCA
The insurance sector is being dragged kicking and screaming into a swamp of regulation by the hyperactive FCA.
The regulatory burden is especially painful for brokers, as many don’t have the resources to cope. No wonder so many are selling up.
Back at the FCA headquarters in Canary Wharf, there are so many secondments and changes at the top in general insurance, it’s hard to keep track of who is actually in control there - let alone getting them to appear at events to speak to the industry at this all-important time.
It’s not just communication issues at the top.
The FCA’s details and guidance on how commercial brokers should approach fair products and pricing in SME - a crucial new slab of its regulation - is lacking.
And at this crucial time, there is a possible FCA staff strike in response to bonus cuts too.
The FCA’s staff union, Unite, claims that staff are leaving in droves and that morale is on the floor for nine out of 10 employees, according to its member survey.
You couldn’t make it up. No wonder brokers are tearing their hair out.
Reviewing competitiveness
Enough is enough.
The government must get a grip on the FCA by reining back its regulatory overreach and bring stability to the organisation
A chink of light has appeared, at last, with news that the government is mulling a competitiveness objective on UK regulators.
The associated consultation, called the Financial Services Future Regulatory Framework Review: Proposals for Reform, is ongoing.
The consultation will examine how the UK can remain competitive and take advantage of its post-Brexit status.
A key part of this will be measuring how our regulator compares on an international competitiveness scale.
The plans are supported by Biba, which has spent the last four years calling for greater FCA scrutiny.
The insurance sector would be wise to submit its views before the consultation closes on 9 February 2022.
This is because all the signs point to the regulator’s tentacles reaching ever deeper into the insurance sector, with commercial lines now in the crosshairs.
Administration fees will likely come under close scrutiny, followed by commissions and who takes what in the insurance chain.
It could be some time before the conclusions from the financial services consultation are reached and even longer before arising actions come into force.
Inevitably, the FCA will eventually be reined in. That day will be a welcome relief for brokers.
In the meantime though, it’s all hands to the regulatory pump.
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