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New ABI chief calls for FSA to be proportionate

Association of British Insurers’ newly appointed director general Kerrie Kelly has appealed to the FSA to be more proportionate in its judgements on likely consumer detriment.

Speaking at the FSA Insurance Sector Conference in London today, Kelly, who succeeded Stephen Haddrill in the role, says the ABI’s members need to see that the FSA is “open-minded and balanced”.

She says: “Whether it is the culture of Arrow visits to relatively small insurers, or the attention that is paid to matters such as financial promotions, our members need to see that FSA involvement is proportionate to the risk posed to consumers and shareholders.

“It is important that the FSA is still open-minded and balanced about its judgements on likely consumer detriment and what consumers actually want.”

She adds that if granted the extended redress powers proposed in the Financial Services Bill, the FSA must exercise them only when there is strong justification to do so, avoiding retrospective changes.

Kelly also claimed Solvency II remained “intensely frustrating”.

She says: “It remains intensely frustrating that what was originally a sensible and well considered directive, designed to assist the smooth operation of the single market by delivering a common risk-based regime of capital requirements and supervision, has instead become a vehicle for European regulators to require layer upon layer of additional capital. 

“In doing so, they ignore the fundamental risk-based approach of the directive and the need to recognise the social and economic value of insurance products that are accessible and affordable.

“These proposals are now being scrutinised very closely by the European Commission and it is essential that everyone – ABI, industry members and those FSA and Treasury officials representing the UK – support the Commission in pushing back against the extreme conservatism of the Ceiops advice to ensure common sense prevails.”

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. The FSA “open-minded and balanced”? You’re having a laugh Ms. Kelly. The FSA has its own agenda (not even answerable to government, so Hector Sants would have us believe) and anyone who disagrees can either jump off a cliff or be trampled underfoot if they don’t get out of the way. The FSA doesn’t even make a pretence any more of conducting anything in the way of a cost:benefit analysis before announcing its latest new regulatory initiative whilst announcing at the same time that the last one turned out to be a crock of s**t, like like everybody said it would.

    Except for the banks, of course, because if the FSA pisses them off too much they have the muscle to mount a legal challenge.

  2. Incompetent Regulators Awards Team 18th March 2010 at 11:52 am

    OK Proportionate then!

    BANKS have 59% complaints upheld against them and have required £200 billion tax payers money to be propped up – regulate them to the hilt.

    IFAs have less than 1% UPHELD compliants with FOS – No regulations required

    That’s proportionate

  3. Will this industry ever sing from the same hymn sheet? Will those who do the singing ever be truly representative of those on whose behalf they sing? Is that English? Never mind.

    Telling, or asking, the regulators to be “open-minded and balanced” is misplaced when the regulated are causing so many problems that it stretches the regulator’s resources to breaking point. Nobody can deny that it is a mess out there.

    Would I want to be a regulator? I might think about it if the regulated promised to behave themselves and the regulator was willing to listen to some ‘mavericks’ who find it hard to say yes all the time.

  4. Jennifer Nicholls 18th March 2010 at 12:03 pm

    Kerrie Kelly rules:)

  5. Insurance Personality of the Year award beckons? 18th March 2010 at 12:36 pm

    As usual, whenever a Director or Director General makes such ‘calls’ they are invariably completely underwhelming. I doubt Hector is remotely interested in such flaky comments.

    However, good work if you can get it. Also, I suspect Kerrie could possibly win a Insurance ‘Personality of the Year ‘award for her approach and determination?

  6. Never Too Old To Rock 18th March 2010 at 1:21 pm

    FSA to be proportionate!!! more like ‘Thick As A Brick’—Jethro Tull.

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