FSA tells general insurance intermediaries no excuse for failing to protect client money...
The Financial Services Authority (FSA) said today that general insurance intermediaries holding client money have no excuse for failing to protect it adequately after recent work found that those who used its new Client Money Guide showed a marked improvement.
Between September and December 2006 the FSA conducted its third phase of client money work visiting 161 general insurance intermediaries.
Results showed that most intermediaries in the sample who had used the FSA's new tools provided to help them, which include the Guide to Client Money and a web-based training course, had a better understanding of client money handling than in previous FSA work on this issue.
Highlighting the fact that this was a priority for the FSA, Sarah Wilson, insurance sector leader, said: "We are still concerned about the overall level of compliance in this area as some firms only used the help available once they were aware of our forthcoming visit or did not use it at all. General insurance intermediaries holding client money should be aware that we could visit them at any time and they should act now, if they haven't already, to ensure they have the right systems in place." She added: "Any failures that we identify will continue to be viewed seriously."
The FSA's findings showed that the main areas where its tools helped intermediaries improve their client money compliance were regularly doing a client money calculation correctly; segregating client money in trust accounts within one day of receiving funds; and arranging for client money systems and controls to be audited.
