1) Directly Authorised

Characteristics:

Direct Application for Authorisation to the FSA
Directly regulated by the FSA
Maybe directly audited by them at any time
Some statutory reporting requirements and must report business information to them on request
£1,500 FSA application fee and annual charges
Can carry out any business for which ‘permissions’ have been received

Most appropriate for:

Companies that can afford the fees
Companies wanting freedom to pursue a range of regulated activities (e.g. sell products from a range of different providers)
Companies wishing to appoint their own Authorised Representatives

2) Appointed Representatives

Characteristics:

Appointed by a Directly Authorised firm (the ‘Principal’) who advises the FSA
Is able to transact any business that the Principal is authorised to transact, including effecting sales and the provision of advice if allowed
Must follow systems, controls, procedures etc. as directed by them
Principal is responsible to the FSA for the Appointed Representative’s regulatory activities and may withdraw authorisation at any time

Most appropriate for:

Companies with limited budget and scope of regulated activity who have a willing Principal

3) Introducer Appointed Representatives

Characteristics:

Appointed by a directly authorised firm (The ‘Principal’)
Is only able to undertake the following activities:

Effecting introductions
Distributing non-real time financial promotions (i.e. travel insurance details are communicated not as part a personal visit, telephone conversation or other interactive dialogue)

Principal is responsible to the FSA for the Introducer Appointed Representative’s (more limited) regulatory activities and may withdraw authorisation at any time

Most appropriate for:

Companies who currently undertake minimal CTI activities but wish to be able to accommodate customers who enquire about travel insurance

4) Unregulated Introducers

Characteristics:

May provide customers with information or leaflets
May not pass customer details to an insurer or intermediary

Most appropriate for:

Companies who transact virtually no CTI and do not wish to offer a service beyond the handing out of leaflets

5) Undertake No Travel Insurance Activity

Characteristics:

May not discuss or distribute travel insurance promotional material

Most appropriate for:

Companies that currently transact no CTI

Different Types of ‘Authorisation’

It is possible to become authorised to carry out regulated activities in a number of different ways. Every firm that decides to carry on with CTI sales and/or mediation will need to decide if they will be authorised and if so how.

Here is a short explanation of the options: