John Tiner, managing director of the FSA Consumer, Investment and Insurance Directorate, has written an open letter to Chris Woodburn, chief executive of GISC, “to set out the FSA's view of the value of on-going membership of GISC.”
Tiner confirmed that the FSA will help firms which are members of GISC “to prepare for statutory regulation”. He wrote: “We have published criteria against which we will in due course establish the extent of credit to be given, but we certainly expect membership of GISC to be a positive factor - that is that firms that have already satisfied GISC requirements will receive credit in the authorisation process.”
The FSA statement follows an announcement in October by Ruth Kelly, Financial Secretary to the Treasury, in which she paid tribute to the work of the current insurance regulator, GISC, and said “It is important that GISC remains in place and is effective until statutory regulation comes into force to ensure a smooth transition.”
Commenting on Mr Tiner's letter, Anthony Howland Jackson, chairman of GISC says: “I am delighted but not surprised that the FSA has given a strong endorsement to the role that GISC has played in the past and will continue to play in the lead up to statutory regulation. It is quite clear that businesses regulated by GISC will benefit from their membership in the FSA authorisation process.”
GISC chief executive Chris Woodburn added: “Once again GISC is named as an important player in this transition towards statutory regulation. I trust that our members, and those who have not yet joined, will recognise the importance of this statement and be assured that committing to voluntary regulation by GISC represents a sound commercial decision for those wishing to be authorised by FSA.”
He pointed out that with a proposed transfer date of October 2004, GISC will probably have to cease taking new members during 2003. He also reminded the industry that those not authorised by the FSA would not be able to continue trading thereafter.
“Firms should join GISC in the near future to give themselves time to become compliant with GISC requirements and qualify for due credit”, he stressed, but warned: “GISC will not become a fast track, transit lounge to the FSA. We will continue to require members to comply with our rules.”
Tiner also confirmed in his letter that the FSA is “looking to benefit from the lessons which GISC and others have learned over the last few years, and where possible, to build on the work they have undertaken. GISC has played a key role in raising standards among the firms which it regulates, in enhancing consumer protection and also in building consumer confidence in this marketplace.”