The delay to the implementation of Rule F42 gives us more time to lobby against the possibility of duplicated regulations, says Paul Smee
The fact that Rule F42 cannot yet be implemented means we have a welcome breathing space on the issue of dual regulation and the General Insurance Standards Council (GISC).
The Association of Independent Financial Advisers (AIFA) has been lobbying against the need for advisers ' whose general insurance is incidental to their main business ' to be required to be regulated by both the FSA and the GISC. This is a particularly ridiculous outcome for waiver of premium contracts which now fall under GISC regulation. On this issue, the AIFA has suggested to the GISC that, as the advice given on such products would always be connected to advice in respect of an FSA-regulated product ' a pension ' that GISC intervention would be superfluous.
In this day and age in what the Government and regulators refer to as 'streamlined regulation', we hope this duplication can be avoided. It is highly unlikely that those intermediaries who are already regulated by the Financial Services Authority (FSA), with everything that entails, are going to suddenly mis-sell the small amount of general insurance products to consumers and risk their good name in the process.
Of course, we have never had any objections to intermediaries whose level of general insurance business warrants registering with GISC. After all, general insurance is not regulated by the FSA.
But what we have been trying to do is to negotiate an agreement with the GISC for those intermediaries who undertake incidental general insurance business related to their FSA-regulated business.
The AIFA's intention has been to ensure that although those intermediaries will have to register with the GISC, the rules will not bite except in a requirement to adhere to their high level principles. It is also negotiating a reduced fee for those IFAs whose general business is below a certain premium level.
For the moment, the GISC will continue as a voluntary regulatory body and its members are free to deal with non-GISC intermediaries. We await the outcome of the appeal with interest.
