The Financial Services Authority last week 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 brokers.
Results showed that most brokers in the sample who had used the FSA’s tools provided to help them – which include a guide to client money – had a better understanding of client money handling than was found in previous FSA work on this issue.
Sarah Wilson, insurance sector lea-der at the FSA, says: “Ensuring that firms protect client money remains a priority for us.
“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.”
The FSA is warning general insurance brokers holding client money that the regulator could visit at any time and they should act now to ensure they have the right systems in place.
Wilson adds: “Our previous client money work revealed a worrying level of failure. Effective tools are available to ensure compliance where there is any doubt. Any failures identified will be viewed seriously.”