Watch out, British insurers and brokers, here comes the FSRA! It feels like it, anyway, as UK Treasury Financial Secretary Ruth Kelly announced proposals to regulate the sale of general insurance.

The regulations are intended “to enhance consumer protection in an important area of people’s lives”, she said. “Everyone takes out a general insurance product of some kind or another.

“Consumers will benefit through increased protection and better quality advice, and industry will benefit through the simplifying and streamlining of regulation. 

Intermediaries selling general insurance, mortgages or pensions will all come under the Financial Services Authority as the single regulator. “There will be new opportunities for brokers as they will be able to compete for business in other European Union countries, ” Ms Kelly said.

She paid tribute to the work of the General Insurance Standards Council, the present general insurance self-regulator. “It is important that the GISC remains in place and is effective until statutory regulation comes into force to ensure a smooth transition. This progression will be aided by the FSA giving due credit to firms in ‘good standing’ with GISC and other comparable organisations.”

There will also be a compulsory mediation system, with exemptions for insurance sold as part of a package, including travel insurance sold with a holiday and extended warranties.