At the Future of General Insurance conference on 5 November 2008, Sarah Wilson, the FSA's insurance sector leader, warned that the insurance industry might find itself under pressure if it fails to reform its practices regarding contract fairness and customer relations. She added that the FSA will be taking a keen look at the sector, particularly in light of the added risks it faces in the current economic climate.

Ms Wilson said that firms can expect "greater focus from us on the sustainability of your business models, the credibility of your strategic planning, and the adequacy of your stress testing and scenario analysis" and that there would be a greater focus in individual capital assessments on risk management, stress testing and scenario planning.

The FSA will continue to advocate the treating customers fairly principle (TCF) across all firms, (see previous blogs on TCF here and here. Ms Wilson said that the FSA will require firms to comply with the new ICOBS rules by the December deadline, or at least to be able to demonstrate "clear accountables and timelines for taking action". To abide by TCF, firms are expected to have instilled a culture whereby they understand what the fair treatment of a customer means; to be appropriately and accurately measuring performance in all customer fairness issues, and acting on the results; to be demonstrating that their processes are delivering fair outcomes; and to have no serious failings. In addition, the FSA will also continue to assess unfair terms in consumer contracts. A copy of the speech can be found by clicking here.