A deluge of 'fair practice' is driving insurers' customers to the internet, says Elliot Lane

' Treating customers fairly should be the mantra for all UK businesses, not just insurers and brokers. The FSA's decision to consult the industry on this subject does beg the question: so what is the industry doing that is so wrong?

There have been clear cases of mis-selling in the life and pensions industry, but in the general insurance market the continual refrain is: this regulatory regime is a sledgehammer to crack a very small nut.

This is what the FSA is asking the industry to consult on: "We expect firms' senior management to assess their current performance against the requirements to treat customers fairly, identify possible areas for improvement and ensure that the principle of fairness is embedded throughout their firm and culture."

The use of the word 'fair' has become as ubiquitous as Gordon Brown's love of prudence. But how can the industry 'embed' any kind of fairness or professional standards when the FSA is again being vague about the detail.

There is also the case of moving from the sublime to the ridiculous. Call centre scripts are a good example. Customers ringing a call centre are subjected to around five minutes worth of information listing the responsibilities the insurer has to the FSA or not in certain cases.

With chief executives' performance being monitored for conversion and abandonment rates, a number of leading insurers are literally ripping up their scripts and starting again.

One chief executive of a major insurer, which is ultimately controlled by a major bank, said he had thrown out the scripts.

"I have no qualms ignoring the FSA rules because I am compliant under the banking regulations. If the parent company's compliance officer is happy, then I'm happy," he said.

The worry is that the over-burdening regulatory rules on insurers is leading to a disgruntled consumer base which will inevitably put down the phone and go straight on to the internet. There, the consumer can look for the cheapest price , and then click and 'buy'.

They then totally ignore the policy, the small print and the advice.

Is that treating the customer fairly? IT