I am absolutely amazed at the latest comments from the FSA, that it does not understand the loss adjusting market ("Loss adjusters too taxing to regulate", 20 March, Insurance Times).

In simple terms it is more than happy to regulate the sale of insurance products to the general public, but when it comes to ensuring that the public receives the correct payments from the industry it seems it does not want to know.

Come on now, the sale of a product is only 50% of the insurance process, what about the other half?

My company has vigorously responded to CP160, suggesting that at least independent loss adjusters should be directly regulated.

We have made representations to both the Treasury and the FSA on behalf of all the independent loss adjusters working directly for the public.

The fact that Cila works for the public came as a surprise to both the Treasury and FSA. But in our discussions with it, its opinion was that anyone who is client-facing and handling settlement monies should be regulated.

If the FSA source is to be believed, the regulator will end up creating an unworkable system of directly regulated, indirectly regulated and unregulated claims services all supporting the insurance customer.

It is absolutely incredible that, even in the eyes of the FSA, a completely unqualified and unregulated individual can set up an entity to handle the public's claims today, and tomorrow could be handling client money with no industry checks and balances.

For many years I have been advocating unilateral, industry-controlled regulation for claims services. If the FSA does not currently understand the claim-making process, surely it is time for it to do so.

To simply say it is too complex to regulate is to risk creating even greater damage to the industry and its customers. I would urge the

FSA to set up a working party now to explore how to resolve this important issue.

Malcolm Harvey
Managing director
Loss Recovery Group

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