On 5 March 2013, the UK's Financial Services Authority (FSA) published a Discussion Paper on behalf of the Financial Conduct Authority (FCA), one of the two regulators that will replace the FSA on 1 April 2013.DP 13/1** is brief and (footnote 4 aside *) admirably transparent. This gist is that the FCA could be more transparent than the FSA by, for example:
- Telling whistleblowers whether it will act on the information they've provided, and what type of action it will take, instead of saying little or nothing to the whistleblower or anyone else;
- Publishing more aggregated information about:
- The authorisation process – for example, how long it usually takes to get an application approved, and why applications are usually rejected or withdrawn;
- The results of its thematic work;
- The redress scheme arrangements made by particular firms – for example, how much redress has been paid and why.
- Publishing insurance product complaints data. Here, the paper notes that:
"Transparency may be an effective tool in certain insurance markets…Our initial thinking suggests that this could work particularly well for add-on and non-core products such as warranty, home emergency, identity theft, and mobile phone insurance…[We]would need to agree the level of detail and the methodology required to deliver the most accurate information and to create an appropriate impact. The following examples have been suggested:
- Claims per customer;
- Successful claims percentage following an initial contact;
- Premiums vs. payout ratios; and
- Reducing/refusing claims due to non-disclosure.
[There] are limitations to what can be interpreted from the release of such data. There may also be valid reasons as to why some lines of insurance have low claims per customer…[What] may be useful for the market to view are outlier products or firms…and …trends over time…"
Like any Discussion Paper, this one sets out some preliminary ideas, and invites readers to get involved in the discussion that follows. Comments are should be submitted by 26 April 2013.(* Footnote 4 simply reads: "Ibid".)