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Insurers still struggling on GI regulation

Providers are still finding difficulties with general insurance regulation and a huge amount of work is needed to stop the industry falling foul of the scandals that have rocked the life and pension industry, claims compliance consult- ancy Huntswood.

It says six months after regulation was introduced, many insurers are finding it tough to adapt to the rules and are worried about implementing the FSA’s regulatory objectives.

Research conducted by Huntswood shows that 31 per cent of insurers are most anxious about the issue of suitability of advice. The second biggest worry is training and competence with 22 per cent.

It says 95 per cent of firms say they have written a risk management plan, required by the FSA, but only 56 per cent say they are on target to achieve what is set out in their plan.

Twenty-five per cent are dissatisfied with the risk management measures implemented by their firm.

Huntswood polled 32 individuals with regulatory responsibility within 23 firms, including eight of the 10 biggest UK insurers.

Senior consultant Andrew Wheeler says: “It is right that insurers are most concerned about sales and suitability. The life and pension industry has suffered extensive reputation and financial losses due to past misselling scandals.

“The GI industry, whether conducting advised or non-advised sales, has a long steep learning curve to minimise similar regulatory censure.”

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