In a speech in New York last night, John Tiner, chief executive at the Financial Services Authority, pledged to crack down on unauthorised general insurance intermediation business.
He says the FSA has already been taking measures to crack down on unauthorised business in the mortgage market and will continue to do this in the insurance field.
He says: “First, we must be attentive to what we call perimeter issues, where firms are doing general insurance intermediation business without being authorised to do so.
“We are already doing this in the mortgage market, which has been our patch since October 31, and we expect to crack down on any firms carrying out unauthorised general insurance intermediation business in the same way.”
Tiner also called on insurers and brokers to come up with proposals to reform their practices, or face enforced change.
He says that industry structure problems, uncertainty over the terms of contract agreements, conflicts of interest and proper handling of claims will be at the top of the FSAs agenda.
He says: “If the market is not able to come up with its own set of solutions which addresses adequately this issue, we have a number of tools at our disposal which can create tough incentives for them to get it right.”