The Financial Services Authority became the regulating body for the insurance industry on 14 January 2005. Regulation is statutory i.e. it is illegal to deal in general insurance without being authorized to do so.
Broadly, any company that deals in general insurance by way of business, however small a part of the business it might be, must be regulated and anyone who advises on, sells or administers general insurance must be proven to be competent to do so.
The Financial Services and Markets Act 2000 gave the FSA four statutory objectives.
- Market confidence: maintaining confidence in the financial system
- Public awareness: promoting public understanding of the financial system
- Consumer protection: securing the appropriate degree of protection for consumers
- The reduction of financial crime: reducing the extent to which it is possible for a business to be used for a purpose connected with financial crime
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