Question: What is the FSA's intention with regard to making sure employees are fit and proper to carry out insurance business when that business (claims) has been outsourced, say to India? If the work is client facing, will staff in India have to be regulated by the FSA to be fit and proper?
ANSWER: Claims activities undertaken on behalf of an insurer are the responsibility of that insurer. Staff handling claims on behalf of an insurer, regardless of where they are located, will be subject to Chapter 1 of the FSA's training and competence (T&C) sourcebook, known as the commitments.
From the broker perspective, the answer depends on the activity that is outsourced. If it is a regulated activity, the outsource provider must be authorised or be an appointed representative. In this case the T&C rules will apply. On the other hand, if the activity is not regulated, then the provider does not need to be authorised and the T&C rules will not apply.
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