A broker registers with the GISC. He has no charges against his business and maintains his accounts correctly. Commission is never transferred from the insurance bank account until insurers' accounts are paid. Each month books are reconciled with bank statements and at no time is the business account allowed to slip into the red.

In every respect this is a solvent business. Many businesses would be only too pleased to be able to operate without having some sort of charge against them.

I would like to hear from any accountant who might challenge this statement.

Why is it then that, in insurance, such a situation is seen as unsatisfactory? Why is it then that the GISC requires the business to produce a report every month confirming nothing more than what the proprietor has already proved when reconciling the bank statements?

We are already in a situation where businesses are spending time and money on totally unnecessary administration.

It is vital that the regulators are made aware of this fact and are forced by rational argument to come up with sensible rules. They have a duty to the customers they appear to be protecting to make regulation cost-effective.

The customer is eventually going to foot the bill.

It is quite possible that this totally solvent business will in future be required to retain `dead money' in its business account below which level it will be deemed, in the regulator's eyes, insolvent. Remind me to check the local chip shop's bank statement before I make my next purchase. Its solvency margin might be crucial if it sells me a bad meal.

The FSA will get us all to jump through hoops, so that it can say it did all in its power to protect the public when things go wrong. Who exactly is it protecting?

Graham Skirrow
Skirrow Insurance Services

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