First Steps
Your first step towards regulation is to answer a number of key questions. These will help determine your route forward.
1) Are your CTI activities to become regulated on 1st January 2009 and/or are you exempt in any way?
If you sell or mediate in CTI contracts then you are likely to become regulated. You may want to consult your insurance provider or other expert party to confirm this.
2) Will you continue in the CTI market after regulation?
In other markets (e.g. the motor industry) the introduction of regulation has seen many companies, particularly ‘secondary intermediaries’ (companies for whom the regulated activity is not their core business activity) exit the insurance market. According to the FSA consultation paper on CTI (CP07/22) the FSA clearly expects the same to happen in the CTI market. So you may need to consider whether the costs of regulation outweigh the benefits.
3) What method of authorisation will you select?
You must decide what method of authorisation to choose (see our Authorisation page.) This may turn into a decision as to whether to become Directly Authorised or to become an Appointed Representative (AR). If you are to become an AR then you need to identify a ‘Principal’ and it is likely that your Principal will provide you with operational procedures to follow, including regular reporting of key management information, and they will audit your activities.
4) Who will do the work both to get authorised and to achieve compliance operationally? Will you have a formal project?
- Will you nominate someone internally to carry out most of the work in addition to their current role?
- Many companies use expert compliance companies such as Compliancy Services. (Click here to contact us)
- You could recruit a dedicated compliance officer if you are of sufficient size to warrant it
In practice what normally happens is a combination of some of the three of the above
5) If you are a wholesaler or distributor of insurance are your distribution channels under threat for the post regulation period?
This one is not easily answered, but you should be considering it now. Please contact Compliancy Services if you would like to discuss this issue.
6) Where else can I get help?
- You can also get help from the FSA themselves www.fsa.gov.uk (There are further contact details for the FSA on their site)
- Your insurance supplier
- Compliancy Services – we are experts in regulatory compliance
- Your industry association
If you can answer these questions then you are underway!
You should also refer to our suggested timetable page suggests an action plan for different types of companies during 2008 to ensure they are ready for regulation.
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