Car firms struggle with Financial Services Authority insurance rules

Thu, 21 Jul 2005

Car dealers are still struggling to comply with changed general insurance regulations imposed by the Financial Services Authority.

These new regulations came into effect on January 14th this year, but the most recent Motor Trader Franchise Barometer indicates that these are not yet being implemented consistently.

More than a third of car dealers reported that they were not confident about their staff's consistence compliance to the new insurance guidelines set by the financial services watchdog.

According to the Financial Services Authority's new rules, any general insurance provider needs to be authorised by the financial services watchdog in order to sell insurance.

Insurance providers need to apply formally for accreditation as insurance provider that is approved by the Financial Services Authority.

Insurance staff should be trained continuously and should be tested on the knowledge and general principles of insurance.

Further guidelines include that the insurance provider needs to submit details of the staff members that are the people approved to run the organisation.

The insurance providers that get authorisation from the Financial Services Authority must also maintain net assets of the highest between five per cent of net income from insurance or £10,000.

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