I believe that Ellis is wrong in his statement that "not a great deal that's positive will happen". Regulation requires prompt issue of documentation, and prompt payment of return premiums.The FSA will very quickly become aware of bad practice such as described by Ellis, and take appropriate action - after all, it is no different from the countless mistakes and delays caused by proprietary insurers regularly commented on in your publication.

Our compliance policy currently being put in place will, of course, apply to customers with whom we deal direct; but we do not intend to apply dual standards, therefore our dealings with our brokers will be to the same regulatory standards - not least to ensure that our broker is able to comply with the regulations in his dealing with his client.

The FSA ruling on client money in respect of binding authorities, which states in CASS 5.2 that such monies constitute "risk transfer", is also a major protection to the policyholder (and to the broker, who can cease to account for such money as "client money" once he has paid us). It is my fervent hope that FSA regulation will weed out both bad brokers and bad wholesalers, it remains to be seen whether that will happen.

Paul Hudson
Leisureinsure

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