csma - General Insurance Regulation

What's Changing?

In December 2001 HM Treasury announced the Financial Services Authority's ("FSA") powers would be extended to include the regulation of general insurance sales and administration, and mortgage sales and administration.

From January 2005 this will affect csma in two areas, namely the Britannia Rescue breakdown service and the csma Travel Insurance product, both of which are fully insured and shortly to be subject to FSA regulation.

Aren't these activities regulated already?

Some activities are currently regulated under a voluntary arrangement. The new regulatory regime is compulsory, and based on law. To continue offering you travel insurance and Britannia Rescue, csma has applied to FSA for authorisation for general insurance regulation starting on 14th January 2005.

Who are the FSA?

FSA are an independent body that regulates the financial services industry in the UK. They have four main aims:

Maintaining confidence in the UK financial system. They achieve this by, among other things, supervising exchanges, settlement houses and other market infrastructure providers; conducting market surveillance; and transaction monitoring.
Promoting public understanding of the financial system. They help people gain the knowledge, aptitude and skills they need to become informed consumers, so that they can manage their financial affairs more effectively.
Securing the right degree of protection for consumers. Vetting at entry aims to allow only those firms and individuals satisfying the necessary criteria (including honesty, competence and financial soundness) to engage in regulated activity. Once authorised, FSA expect firms and individuals to maintain particular standards set by them. They monitor how far firms and individuals are meeting these standards. Where serious problems arise they investigate and, if appropriate, discipline or prosecute those responsible for conducting financial business outside the rules. They can also use their powers to restore funds to consumers.
Helping to reduce financial crime. FSA's work focuses on three main types of financial crime: money laundering; fraud and dishonesty; and criminal market misconduct such as insider dealing.

Why has this change come about?

A major factor influencing the Treasury's decision to regulate general insurance selling and administration has been the need for the UK to comply with European legislation, in particular the Insurance Mediation Directive ("IMD"), which aims to create a single market in insurance across Europe.

What will this mean for me in dealing with csma?

There will be some small changes in the way we deal with you. You may notice a difference in the way we present information about our travel policies and Britannia Rescue policies - for example there will be a policy summary giving you important information under a 'key facts' logo. We will give clear information about what needs a particular policy will meet, helping you to decide if it is suitable for you.

Once approval has been received then you will see a reference to the fact that we are authorised by the FSA on our letterheads.

You will notice in our brochures and other documentation a reference to the fact that calls may be recorded. This will enable us to ensure that the people you speak to provide you with good service, and also means there is an accurate record in the event of any subsequent dispute about instructions for example. When you call us for a quote, there will be certain items of information that we will need to provide to you with in the course of the call.

However, the main changes we will be making are 'behind the scenes' in the way we process and record business. So, for example, if you have a complaint that we cannot resolve with you immediately, we will pass this to a central independent team for review and response. This will ensure we are fair and consistent in our dealings with all csma members and can use the information to improve our products and services to you. You will receive updates of progress at prescribed intervals, and if you remain dissatisfied with our final response, you will be provided with details of how to refer your complaint to the Financial Ombudsman Service for review and adjudication.

csma has always made member service and fairness in our dealings with members a priority and with csma as a FSA authorised company you will have even greater protection. We see this as a very positive step in our development with real benefits to you, our members. As the January 2005 regulation date draws closer we will progressively be keeping you up to date with any other changes and how they may affect you.