Risk managers were given a reprieve this week when the FSA announced that many group risk managers will escape regulation when the Insurance Mediation Directive comes into force in January 2005.

Airmic is now lobbying the Treasury to grant the exemption under legislation.

An FSA spokeswoman said: "We have, throughout, recognised the force of the policy arguments that you [Airmic] and others have made on behalf of group risk managers and we are pleased that we have also now identified a possible legal basis for deciding that authorisation may not be necessary."

The FSA made its announcement after Airmic obtained an opinion from counsel, which said: "The UK, by including group risk management companies within the scope of the FSMA 2000 regulations on insurance mediation, has not properly incorporated the Directive into English law."

An Airmic spokesman said: "The Treasury are saying a decision will happen fairly soon but they're not saying when. The principle has now been accepted that group risk managers don't have to be regulated and that has gone down well with Airmic members."