In an effort to boost competition between insurance firms, the Financial Conduct Authority (FCA) has published proposed rules on complaints handling and professional indemnity insurance (PII) as part of its Insurance Distribution Directive.
Earlier today, the regulator published the first of two consultation papers on the directive in which it outlined that intermediaries must complete a minimum 15 hours CPD; that firms must maintain records that ensure employees are competent; and that both intermediaries and insurers must have a clear process in place for the registering and responding to complaints. The idea behind the changes is to limit the chances of mis-selling while boosting competition.
In addition, the directive also put forward minimum guidelines for PII with firms having until June 05 to issue their responses.
“This directive is a significant piece of legislation with implications for the insurance industry as a whole,” said Christopher Woolard, executive director of strategy and competition at the FCA.
“Many of the changes extend UK standards to other parts of the EU and where domestic provisions already exist we will seek to minimise the disruption to UK firms.”
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The Insurance Distribution Directive is actually a furthering of the Insurance Mediation Directive introduced back in 2005. It is set to apply on a wider scale than the existing directive with consumer protection rules for insurance to fall in line with those in other financial markets.
A second consultation paper will be published later in the year and will look at requirements that have not yet been adopted by the European Commission.
Once finalised, UK firms will have until February 23, 2018, to comply with the directive.
You can see the consultation paper on the directive in full
here.
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