Fears for orphan business if authorisation decisions are not revealed
The FSA will not provide insurers with information on which brokers it is "minded to authorise" until November at the earliest.
The decision comes after insurers met the FSA to express their concerns about "orphan" business.
Orphan business refers to the business of those brokers that fail to gain authorisation from the FSA. Insurers are concerned that service and cover may be disrupted, particularly for policyholders with renewals on1 January 2005.
They had been pushing for the FSA to create and give them access to a database which would be updated throughout 2004, as brokers were issued with 'minded to authorise' letters.
These indicate the FSA's intention to approve a broker for regulation.
The head of policy and technical standards for the FSA's high street firms division, Eleanor Linton, said the first letters will be sent out in April.
One insurer source said that in order to ensure a smooth transition for 1 January renewals, insurers needed to know which brokers the FSA was minded to authorise in September.
Speaking at an Institute of Insurance Brokers (IIB) conference last week, Linton said that the FSA was looking into ways of how to share details of which brokers it was minded to authorise.
"We're looking at how we can make that info available on firms," Linton said. "We will do everything we can to do it before November."
But an FSA spokeswoman told Insurance Times on Tuesday that creating an early-access system would not be possible. She said that insurers, as well as the public, would be able to access the register of authorised businesses on the FSA's website "up to two months before the start of regulation".
The spokeswoman said insurers wanting to know sooner would have to conduct an audit of their intermediaries.
Allianz Cornhill strategy and planning manager David Barnett said that at present insurers were unsure how big a problem orphan business would be.
He said that one option for dealing with such business would be for insurers to administer the business direct, but said that very few insurers could handle an influx of direct business. The alternative, Barnett said, was arranging an "amicable" transfer of the business to other brokers.
"We're going to have a very limited amount of time to deal with it," he said.
