View more on these topics

FSA admits extra legacy costs

The FSA has admitted there will be additional costs for insurers to comply with the ban on legacy commission despite previously saying it was factored into earlier cost estimates.

In a consultation paper published in November, the FSA said the cost of the ban had been priced into RDR cost estimates from March 2010.

Insurers rejected this argument, saying clarity only started to emerge about legacy commission in March 2011.

The regulator’s policy statement on the treatment of legacy assets says: “We estimate the additional compliance costs – if all insurers changed all their legacy systems to allow top-ups/ increases without commission being paid – to be £460m.”

The FSA says: “We recognise there are risks of poor consumer outcomes for customers with legacy products although we believe that these risks are ones we can monitor and supervise.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com