Press Release

FLA WELCOMES THE DAVIDSON REVIEW’S CONCLUSIONS ON ‘GOLD PLATING’ OF INSURANCE REGULATION

29 November 2006

The Finance & Leasing Association (FLA) welcomes Lord Davidson’s report findings into UK implementation of EU legislation and its proposed action to cut the burden of regulation, particularly in the consumer sales and financial services sectors.

FLA welcomes the report’s acknowledgement that there are areas of existing legislation which, due to gold-plating and regulatory creep, have resulted in unnecessary regulatory burdens.

The Davidson report suggests that one key area where the UK government could simplify existing legislation is in the newly regulated insurance sector. FLA endorses the report’s recommendations in this area which includes steps the Financial Services Authority (FSA) should take by July 2008.

These include:

simplifying rules on product disclosure and reducing the amount of information that insurance intermediaries are required to provide to their customers when selling lower risk products
removing the requirement for insurers to check that each intermediary is authorised
cutting down the amount of data required by FSA returns
reducing and simplifying client money rules
cutting prescriptive rules which overlay principles and are not required by the Insurance Mediation Directive or Distance Marketing Directive back to principles only
consulting on reducing the scope of the activities caught by the insurance mediation regime, where feasible.
 
FLA Head of Legal Affairs and Policy Development, Ashley Holmes, said:

“These findings are timely as the FSA is currently reviewing its Insurance Conduct of Business Rules (ICOB). FLA hopes the FSA takes on board these findings and recommendations and reduces these and any other unnecessary regulatory burdens on the insurance industry.”