GI brokers must protect consumers money, warns FSA

The Financial Services Authority has warned general insurance intermediaries that they have no excuse for failing to protect client money in their possession.

Between September and December 2006 the FSA conducted its third phase of client money work visiting 161 general insurance intermediaries.

Results showed that most intermediaries in the sample who had used the FSA’s new tools provided to help them, which include the guide to client money and a web-based training course, had a better understanding of client money handling than in previous FSA work on this issue.

Sarah Wilson, insurance sector leader at the FSA, says: “Ensuring that firms protect client money remains a priority for the FSA.

“We are still concerned about the overall level of compliance in this area as some firms only used the help available once they were aware of our forthcoming visit or did not use it at all.

“General insurance intermediaries holding client money should be aware that we could visit them at any time and they should act now, if they haven’t already, to ensure they have the right systems in place.

“Our previous client money work revealed a worrying level of failure. Effective tools are now available to help ensure compliance where there is any doubt.

“Any failures that we identify will continue to be viewed seriously.”