The FSA has underlined its commitment to the European Commission's review of the insurance mediation directive, saying it will be standing up for greater flexibility.
FSA sector manager (retail intermediaries) Paul Rich told Money Marketing that the review, scheduled for April, is important not just to help intermediaries but for the long-term state of the market.
He is keen that the review should acknowledge the viability of intermediaries using capital as well as professional indemnity insurance to meet their liabilities.
Rich says the FSA will work on the review with the Treasury, trade bodies and their European counterparts. He says a positive side of the IMD is that it will start to help with transparency, pointing in particular to general insurance broking where he admits there is an issue around PI commission pricing.
Rich says: “The use of waivers and capital adequacy is an acceptable alternative to PI. We have seen no problems with it so far. Therefore, if it works, shouldn't other countries have the advantage of it? We will do our best to represent how greater flexibility can be good but it will be difficult.”