Surveyors who advise on or purchase insurance for their clients should not risk waiting for a government U-turn on FSA regulation, warned commercial law firm Reynolds Porter Chamberlain (RPC).
RPC FSA expert Harriet Quiney, said: “Arranging property insurance is one the most important things managing agents do. Expertise in property insurance is an integral part of their service and, quite rightly, they derive a significant income from this activity.
“Past experience of the implementation of financial services legislation by the Treasury is that they will not make the kind of u-turn needed to opt managing agents out of FSA regulation.
“Managing agents have just two months to meet the deadline. Whilet lobbying might succeed we really would urge managing agents to have a contingency plan in place.”
RPC said it would be hard for the Treasury to be convinced that managing agents should receive an exemption similar to that of accountants and lawyers as:
· The Law Society, Institute of Chartered Accountants in England, Wales and various other bodies have achieved this exemption for their members by being approved by the Treasury as “designated professional bodies”. For the Royal Institution of Chartered Surveyors to achieve this status it would have to undertake a lengthy consultation with the FSA over its rules. RPC suggested that such a consultation would not be completed by 14 January 2005.
· Members firms of designated professional bodies are exempt from direct regulation by the FSA if the financial services activities they provide are “incidental” to the other services they provide to their clients. The FSA considers that the insurance services that managing agents provide to their clients are central to their overall service and are not incidental.
