The FSA must get the balance right, says Andy Cook

So policyholders have been left in the lurch by the demise of Ward Evans. We reported last week that policyholders are complaining that money for cancelled policies has not been refunded to them. It seems the cash has been lost with the failure of Ward Evans. And it is unlikely that this money will ever find its way back.

So the general insurance industry, which with the collapse of Independent Insurance failed hundreds of commercial clients, has managed to annoy a few more of its customers. Bearing in mind that it is the job of the FSA to protect customers, would the forthcoming broker regulations have helped in the Ward Evans situation?

Judging by the information currently in the public domain, the answer is no. But that is not the full story. A forthcoming consultation document on the solvency of insurance brokers could provide some hope. The document, which was due to be published by the end of January, will outline the FSA's ideas of how much money brokers will need in the "bank" in order to trade.

Although I hear the paper has now been delayed until March, it seems a number of ideas will be floated that could provide real help. For instance, some kind of protected client account could emerge. This means brokers would not be able to tap into policyholders' money as it passes through their hands on the way to the risk carrier. Alternatively, the FSA may require a fixed percentage of funds to be held in a general account.

Whatever the ideas, it is vital that you take a look and make sure your voice is heard - the whole future of our industry depends on it.