By Marcus Leach
The Association Of British Insurers (ABI) has today called for a balanced approach by the Financial Services Authority (FSA) on product regulation that reflects the diversity of retail financial services markets in the UK.
The FSA does not need to develop new rules and regulations or introduce further radical interventions which risk stifling the market and restrict consumer choice.
As recommended in the ABI’s response to the FSA’s discussion paper on product intervention, the regulator would be better served focusing on more effective, proactive and consistent supervision and enforcement of existing rules that underpin the core principle of treating customers fairly. This will address any developing market failures and increase consumer confidence in the industry.
"We want to see a balanced risk based regulator which oversees a market which delivers positive outcomes that meet consumer needs and expectations," Otto Thoresen, the ABI’s Director General, said.
"This will only be achieved by maintaining a healthy level of consumer choice and market competition. Meeting this objective requires the Government and the regulator to recognise the inter-connectivity of a series of initiatives that form part of an overall package of reforms at both the UK and EU level. Any major change should not occur in isolation, but has to fit with the whole suite of existing and planned regulatory developments.
“We do not consider that the FSA’s Discussion Paper is well placed within the wider regulatory reform context, so we urge the FSA and the Government to ensure that the forthcoming ‘vision document’ for the FCA takes a holistic view that is focussed on delivering good consumer outcomes.”