Officials at the General Insurance Standards Council have taken steps to place tighter restrictions on any of its members, ahead of FSA regulation and the possible influx of last-minute new GISC members.
Under the current terms of the FSA’s authorisation process, members of the voluntary GISC professional body will be given “due credit” for their membership when it comes to applying for FSA authorisation, as the GISC is seen to require a high level of standards from its members.
That said, the GISC appears to be concerned the self-regulatory voluntary body could be subject to “exploitation” and inundated by advisers or brokers who sign up just ahead of general insurance regulation being introduced on January 15th, 2005.
As a result, it has tightened its own membership and announced brokers have until 1 July 2004 to submit their applications for membership, while existing members must have all relevant regulatory paperwork completed by that same date.
The GISC suggests holding voluntary status at the GISC could sway a firm’s authorisation as final judgment will be “influenced by the degree and intensity of regulation that has previously been applied to the firm” as well as the length of time they were subject to voluntary regulation.
However, any decision to join the voluntary body will be a tough one for existing non-GISC members, as retrospective rules – concerning potential mis-selling complaints - will only be applied to individuals who were members of voluntary bodies prior to the introduction of FSA regulation.
This means any adviser or broker who signs up to the GISC before July 1st would have to consider and look at any complaints made about advice given – regardless of whether the firm or individual gave that advice yesterday or 30 years ago – as this is exactly what the GISC expects of its members.
Any non-GISC members, however, will only be required to consider any complaints made from the time they are regulated under the FSA regime.
GISC chairman, Anthony Howland Jackson, explains:
"GISC will, of course, continue its regulatory activities until 14 January 2005, including monitoring GISC-regulated firms to ensure compliance with the Rules, and taking actions to enforce compliance, until the FSA takes over these responsibilities. I am determined that GISC retains its credibility as a regulator and maintains the value of the commitment member firms have made to GISC’s standards of good practice. Firms that have had ample opportunity to commit to voluntary regulation should not benefit from FSA "due credit" where we believe there is insufficient time in which to prove their commitment."IFAonline
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