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Treasury fails to make EU insurance deal

The Treasury has failed to negotiate a UK exemption from EU legislation which states that all insurance intermediaries will have to become statutorily regulated.

If the directive remains unchanged, it will mean the General Insurance Standards Council will either have to become a statutory regulator or the FSA will have to take over the regulation of the advice given on critical-illness cover, income protection and PMI products which are currently non-regulated.

An agreement has been reached between the governments of EU member nations over the Insurance Intermediaries Directive, which is effectively the last chance that individual states have to reach a compromise over it.

A Treasury spokeswoman has confirmed that the main thrust of the directive dealing with statutory regulation has not changed and it is looking to see how it can best implement it in the UK.

The next step in the process is for the Council of Ministers to publish the final wording of the directive and then for the European Parliament to introduce amendments and vote on it. It is due to take effect in 2004.

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