Our expert panel finds the defendent 'guilty'
Broker Network boss Grant Ellis sums up the FSA perfectly: “It comes heavy-handed on things that don’t matter and misses the things that do.” So this week we turn the tables, take a step back, and put the regulator in the dock. After all, nobody really cares about regulation until it interferes in the business of making money.
We asked a panel of experts, including Ellis, to give their verdict on whether the FSA should be reformed and restructured, or simply sent to death row. The charge sheet comes against a backdrop of the Tories’ plan to scrap the authority and its overly bureaucratic and expensive initiatives. There have been questions too about its role, function and widening sphere of influence.
Our panel agreed that the regulator has been too soft on banks and that any remedial work should not fall at the feet of insurers or their broker partners, as the core insurance business model has successfully weathered the storm.
So what should happen next? Our experts make three key recommendations:
1. A single insurance regulator should be established, as in Europe. Insurance should not be lumped in with the rest of the financial services sector.
2. Any new government must overhaul the Financial Services Compensation Scheme.
3. Insurance needs its own regulation tsar – an independent person with industry knowledge, respect and authority with a foot in the government’s camp.
Meanwhile, the ABI is also furious about over-regulation and the prospect of unworkable, clunky, revised Solvency II regulations. The group has written to Chancellor Darling (see page 8) while preparing its wider case, complete with large placards and banners proclaiming “Insurers are not banks”.
Hear what the experts say about Solvency II
Richard Hobbs, managing director of Beachcroft Regulatory Services, is to chair a panel debate on Solvency II at the second Insurance Times Forum on 15 October at the Hilton Tower Bridge. Panel members include Ian Dilks, partner in PricewaterhouseCoopers, David Russell, former RSA Solvency II programme director, and Dr Sandy Scott, director general of the CII.
Sign up today at www.insurancetimes.co.uk/itforum