It was very interesting to hear Andrew Bailey’s comments today in his speech at BIBA particularly to learn the statistics on Insurance Mediation Directive passporting for the insurance intermediary market. If you haven’t seen the quote, apparently some 60% of all passporting requests are from insurance brokers and intermediaries.
I am now going to indulge in what could be regarded as a question from the Brexit version of Trivial Pursuit. As of this April, 5,910 financial services firms were passporting out of the UK under EU Directives, and 8,629 firms were passporting in. If I asked the question, which EU Directive, and hence which financial services activity, has the most passports each way – and here’s one clue, it’s the same answer both ways – which would you guess? The answer is the Insurance Mediation Directive, in other words the insurance brokers and intermediaries passport. The numbers, by the way, were 2,775 out of the UK and 5,853 into the UK. That’s just under 60% of all the passports.
Andrew Bailey, Chief Executive at the FCA
If the experience at ICSR is anything to go by brokers, MGAs and MGUs are coming late to the party. There is good reason for that: they do not need to undertake the burdensome and rigorous requirements imposed under Part VII of the FSMA in the way insurers do. However, they still need to undertake work to identify the business impacted, make a decision on their approach to resolving the issue and then implement it. For MGAs and MGUs there are further complications because of the nature of regulation in some EEA countries. Any intermediary who has not at least started this work is leaving it very late. Experienced resources available to help with this work are scarce and already busy.
With a further significant focus on Data, both security and GDPR, Andrew has clearly outlined expectations. Interestingly, this is another area where, in ICSR’s experience, the insurance market is lagging as late engagements continue to be frequent. It may be that the obligation is to only be advanced in work to comply but I think it fair to say that advanced does not mean just commencing.
We are working on all of these issues as well as helping clients with the other issues identified in the FCA Plan including corporate governance, a perennial focus for the FCA. As a real alternative to other firms we have capacity and are available to discuss any needs clients may have.
You can read the full text of Andrew Bailey’s speech on the FCA website.
