The campaign launched by the British Insurance Brokers Association (BIBA), which saw the industry body submitting a petition with 7,000 signatures urging the Financial Services Authority (FSA) to speed up the review of the Financial Services Compensation scheme (FCFS), may have hit a brick-wall as the as regulator claimed the process can’t be accelerated ahead of reforms.
The BIBA petition, launched on 11 April 2011, had called on the House of Commons to urge the Treasury for accelerating the FSA review of the FCFS consultation.
MP Jonathan Evans, chair of the All Party Parliamentary Group on Insurance and Financial Services, has tabled the paper for debate in a little less than nine weeks in the House of Commons, giving it official recognition.
But all the efforts may very well go down the drain. The FCFS review, originally introduced in 2009, was later unceremoniously shelved. The FSA now claims it can’t speed up the process as it waits for the outcome on government reforms and ongoing negotiations in Europe.
Till all the issues are settled, it will be useless to conduct the review, said the FSA.
“Without clarity from Government on how domestic regulatory reform and current European negotiations will affect the FSCS, the review cannot move the formal consultation”, said Andrea Kinnear, press officer at the FSA.
The petition had urged FCFS review to be completed by April 2012, before the Levy comes into effect in the next financial year.
However, the FSA even refused to comment if the deadline was realistic since the process is currently hanging fire.
BIBA has complained that the current FCFS funding is flawed and hurts insurance brokers for failings of payment on PPI.
It hopes to see an end to the cross-subsidy system, where brokers pay for investment bankers in certain cases, and separation of full time brokers from secondary sellers when sectors of the industry are levied.