The pressure is on for insurance companies to embrace contract certainty initiatives. Indeed, FSA chief executive John Tiner and Lloyd's chief executive Nick Prettejohn have both recently called for the industry to self-regulate by the end of 2006.
Failure to do so will result in the FSA introducing yet more regulations with which insurance companies will be forced to comply.
The industry is agreed on the need for action to ensure contract certainty, to reduce risk for the insurers and improve clarity for customers in terms of what is covered by their policies and what is not.
At a recent industry event, 89.5% of attendees rated contract certainty as an important issue. The issue of how to ensure it is less clear-cut.
The intention is there, but the industry needs to galvanise itself within the next 12 months or the FSA will take the bull by the horns and impose additional regulations on brokers and underwriters.
Technology has a role to play in ensuring that contract templates are standardised with many clauses made uniform.
Clearly, technology alone will not solve the problem and business process and cultural change among insurers are vital to ensure that there are no roadblocks ahead on the path to contract certainty.
UK country manager