The Market Reform Group has published a letter to all CEOs of UK insurance industry firms with an update on its progress and discussions with the FSA.
In December 2004 the FSA challenged the insurance industry to resolve the long standing problem of contract certainty by December 2006. At the beginning of last year the FSA recognised that the insurance industry’s response to the challenge had been successful.
The letter published last week reports that there has been further improvement across the insurance industry over the past year and that performance in meeting contract certainty requirements is consistently above 90 per cent. Survey results show that 83 per cent of organisations regard their systems and controls for achieving contract certainty to be either ‘embedded’ or ‘very well established’. According to two surveys carried out by AIRMIC and Lloyd’s, customers are much more satisfied with the speed with which contract documentation is received.
In the light of the continued progress the FSA has agreed to the following proposals by the Contract Certainty Steering Committee (CCSC): (i) not to continue to provide further central measurement of contract certainty achievement after the publication of the December figures; and (ii) that the CCSC should stand down after the publication of the letter.
The letter does however make it clear that individual firms should continue to comply with the Code of Practice and that the regulator will continue to ask for evidence of compliance when they visit firms. Firms not meeting the required standards are likely to face FSA action. For further information: Update on contract certainty published (28KB) (.pdf)