Daily briefing: Monday - FSCS review restarts

Regulation tops today’s news agenda, with the very welcome news that the long-delayed review of the Financial Services Compensation Scheme is set to start again next year.
About time too. For too long, the government has been prevaricating, saying that a review of the scheme cannot take place until a wider review of compensation schemes at a European level is completed. How long will that take? How long is a piece of string?

A unified front

At the moment, general insurance brokers are lumped in with banks and other advisers that mis-sold PPI, meaning they are picking up the spiralling bills for the mis-selling of a product that most of them never touched. For this reason, brokers have seen their already heavy regulation bills double and even triple in some cases.
So it’s very welcome news that the government is going to reopen the review and consult with the industry in the first half of 2012. During that period, it will be more important than ever that the industry presents a strong, coherent and unified front.
No doubt Biba, IIB and other bodies will start work immediately on their all-important contributions to the consultation. Insurance Times will continue its Fair Fees campaign, and brokers should start assembling the necessary evidence. The more that can be put to the consultation, the stronger the case will be and the greater the industry’s chance of overturning this injustice once and for all.

Motor must clean up

The FSCS shows only too clearly the cost of regulation. So Jack Straw’s warning that the motor industry could be forced to have its own, separate regulator should be heeded well.
Unless the industry - and that means claims companies and lawyers as well as insurers - cleans up its own house, the government will step in. And that will mean more headaches for everyone involved.