UK insurers could be allowed to deal with intermediaries in countries which do not implement the insurance mediation directive on schedule.
The FSA is to consult in October on a transitional rule that would allow a provider to use an intermediary in a state that has not implemented the IMD on time, providing the insurer has no reason to doubt the good repute, competence and financial standing of the intermediary.
The FSA says the reason for the proposed rule is that, as some states may not implement the IMD in time, their intermediaries will not be registered from that date and so UK insurers that used them would be in breach of FSA rules.
The IMD is set to come into force for firms in January 2005 and is causing problems for IFAs across the UK who are struggling to meet its requirements, which force intermediaries to have £1m in professional indemnity insurance in place by January and does not allow for waivers.
FSA spokeswoman Ruth Excell says: “It is FSA policy to implement EU directives on time whenever possible. UK intermediaries will be in a position to comply with the IMD in January but we are aware of the implications of the inability of other member states to implement on time.