Thousands of risk managers could be acting illegally from January 2005 unless they take steps to restructure their operations, warned a leading compliance consultant.
Thousands of risk managers could be acting illegally from January 2005 unless they take steps to restructure their operations, warned a leading compliance consultant.
Brokers must also take steps to check if the risk managers they deal with need to be authorised, or risk acting illegally themselves.
Last month the FSA gave risk managers an exemption from authorisation for insurance bought on behalf of their group.
But according to Alex Peterkin of FSA Solutions, many risk managers, particularly in smaller businesses, could be carrying out regulated activities and would require
authorisation.
"If you look deeper into the operations many could be purchasing insurance on behalf of third parties - often without realising it," she said. "This requires authorisation."
Peterkin also said that risk managers could also find themselves without insurance cover. "Insurers would be entitled to withdraw from any contract made with an unauthorised firm," she said.
Airmic executive director David Gamble said: "We hope that our members are sufficiently alert to react to this issue."
