FSA Reaches for the Stick
Two years sounded like a long time. Less than one year doesn’t. So with 11 months to go till John Tiner’s deadline for contract certainty in the London insurance market, the question is being asked: what happens if the market misses the deadline? What if the deals are being done, but the details are still missing? Does it really matter?
It’s starting to sound like the answer is yes. It matters. The FSA is reaching for the stick.
Amongst other things, David Strachan, the FSA’s Insurance Sector Leader, hinted that brokers and underwriters who fall down on contract certainty may be required to hold more capital. Another option will be restrictions on the drawdown of broker commissions. Ouch.
Read the full text of David Strachan’s speech at the Insurance Institute of London.