Financial services watchdog, the FSA, will not regulate general insurance once its Financial Services and Markets Bill becomes operational, IIB director general Andrew Paddick said this week.

Paddick was speaking in the light of a speech by FSA chairman Howard Davies that outlines the authority's intentions once the new Bill is up and running next year.

Under the new regime, up to 12,000 IFA's will have to seek authorisations relative to the financial services they intend to advise.

But Paddick believes such draconian measures are unlikely to blight brokers.

He said: "I don't think, the FSA don't want it (general insurance). They haven't got the resources to even think about doing it. They can hardly cope with financial services. They can't get the staff, but the GISC are having a go at regulating general, and we are going to continue with the IBRC, so it's really a case of watch this space."

FSA boss Davies likened gaining new financial services authorisation to driving.

He said: "The authorisation will be rather like a driving licence. In other words you will have a licence but with a list of permissions on it – all those things the regulator allows you to do."