Elliot Lane says a glitch in the FSA's online returns service is spoiling the holiday fun for small brokers
' At this time last year, the beach bars of Puerto Banus were suffering after the insurance industry cancelled its annual summer holiday. FSA regulation deadlines were at the forefront of insurers' and brokers' minds and the cocktails stayed on ice.
This year, holidays were booked early and from the Algarve to Orlando, beaches are beginning to swell with the sunburnt bellies of the insurance world's great and good.
But for some brokers, the dreaded retail mediation activities returns (RMAR) are spoiling the fun.
What has caused chagrin among the regional brokers is that the returns do not distinguish general insurance brokers as a separate section.
One commercial broker said: "The problem seems to be that two sections do not recognise brokers that conduct purely general insurance. They seem to have anticipated that such brokers would transact either mortgage-related or life-related products.
"Considering the FSA is a multi-million regulatory body, I'm amazed."
A deadline of 30 working days after 30 June has been given, but brokers that try to transmit information via the online service will find the return rejected. So the question brokers are asking themselves is: "Will we be fined?"
The FSA admits that there are "teething problems" that will be ironed out and that brokers that do submit information "correctly" will not face any fines. This does however leave a margin of error as to what "correctly" really means.
RMAR returns are hitting the industry hard when brokers are also contending with the added costs from their auditors.
When the Treasury's audit of the FSA found that its costs were too high, its chairman Sir Callum McCarthy said that he would cut the cost to the "smaller end" of the market.
From the brokers' perspective, this needs to be addressed quickly or this year's Puerto Banus holiday might be their last. IT