FCA'S PERIMETER REPORT – OBSERVATIONS FOR THE INSURANCE MARKET

In late October, the FCA published this year's version of its Perimeter Report that makes fascinating reading for some of us….read here

Admittedly, some like cars, some like films, and it takes a certain kind to get excited by an FCA perimeter report, but that is what we at IFAC do for a living.

In the report the FCA claimed that 50% of applicant firms intending to appoint ARs either withdrew their applications or their applications were refused.  As a result, the FCA intends to intensify its scrutiny of all principal firms, and applicants which intend to appoint ARs.  They intend to raise £7.2m from networks in order to fund this enhanced supervision, at a fee of £250 per annum per AR firm.   Nice work on networks, and more elbow grease to the small DA IFA supported by IFAC.

The  FCA also discovered that the industry was hooked on unregulated service providers (especially in technology and information systems) and clearly feels worried about this development that is beyond their control.  They remind readers that firms need to manage these risks carefully.   How so?

The FCA points to the new Operational Resilience rules do not apply directly to unregulated third party service providers the new rules do apply to insurance provider companies and require them to work effectively with third party service providers to ensure that services can be “mapped and tested to identify vulnerabilities.”  Lesson for us all, as these sort of rules trickle down to the lower level a few years later.