British brokers and insurers have welcomed a move by the Financial Services Authority (FSA) to warn comparator site operators to maintain proper regulatory requirements.

In a letter to aggregators, the FSA offers guidance on the fair treatment of customers, highlighting the need to take responsibility for checking eligibility or disclosure of products rather than putting the onus on customers.

The FSA is also calling for comparators to think carefully about whether they are introducing, arranging or even advising customers on purchasing a contract of insurance.

The letter follows a review which found compliance failures that resulted in the unfair treatment of customers.

The British Insurance Brokers’ Association (BIBA) says it first highlighted these issues in 2008 and is delighted its concerns have been addressed.

“We are pleased that the FSA recognises the price comparison website activities to be more than simply introducing, and we trust that the steps that they are taking will close this gap,” BIBA CEO Eric Galbraith said.

BIBA believes these guidance measures are an important component of consumer protection and need to be implemented by the aggregators without delay.

The Institute of Insurance Brokers has also welcomed the proposed guidance measures, saying that as brokers already adhere to a raft of regulations on the sale of general insurance, so should the comparison websites.

“It’s a gradual closing of the regulatory circle,” CEO Barbara Bradshaw told insuranceNEWS.com.au. “Hopefully the more professional advice there is, the less likelihood of future compensation claims.”

Association of British Insurers’ Director of General Insurance and Health Nick Starling says “the association has long had concerns about the potential for customer detriment when using comparison websites”.

Comparators now have until August 8 to respond to the guidance proposals.