What do I need to know about the Financial Services Authority?
The Financial Services Authority is an independent regulatory
body funded by the finance industry, which was given legal powers by the
Financial Services and Market Act (2000). It is a company limited by guarantee.
The Board is appointed by HM Treasury and sets policy. There is also an
Executive which deals with day-to-day business.
The FSA has four aims:
- To maintain confidence in the UK’s financial
structure. The FSA achieves this by, for example, overseeing financial
exchanges and other market infrastructure providers; carrying out market
surveillance; and checking transactions.
- To increase the public’s awareness of the structure
of the UK’s finance industry. The FSA helps people gain the knowledge,
capability and skills needed to become intelligent consumers, so that
they become more able to manage their financial affairs.
- To protect consumers. The FSA monitors all applicants
who wish to be members of the FSA and aims to admit only those organisations
and individuals who meet the stated criteria (including honesty, capability
and financial standing) to be involved in regulated financial activity.
When they are registered, the FSA expect firms and individuals to maintain
the standards defined by the FSA. The FSA then measures how far the
businesses and individuals meet these standards. Where serious problems
are found the FSA examines the situation and, if appropriate, disciplines
or prosecutes those responsible. The FSA can also use their authority
to hand funds back to clients.
- To bring about a decrease in financial crime. The FSA
is concerned with three main types of financial crime: money laundering;
fraud and dishonesty; and criminal financial wrongdoing (such as insider
dealing).
Whilst working towards these aims, the FSA takes account
of:
- The requirement to be cost efficient and effective
in the use of resources.
- The management’s responsibility for the business
it regulates.
- The need to balance any restrictions on financial organisations
with the benefits for customers and industry of the FSA’s regulation.
- The need to promote innovation in business.The international
character of financial markets and services, and the competitive position
of the UK within these.
- The importance of competition between financial firms.
The Regulation of Insurance Intermediaries
The FSA will soon be responsible for the regulation of general
insurance. This will include car insurance, house insurance, contents
insurance and Life Insurance. This has come about because of the Insurance
Mediation Directive from the European Parliament, which makes formal regulation
of general insurance brokers necessary. The new regulations are currently
being discussed and developed to ensure that there are proper protections
for clients while retaining the important business aspects of competition
and innovation.
The changes to Regulation are expected in the UK early in
2005.
Visit the FSA Website
Find the Financial Services Authority at www.fsa.gov.uk
Is Life Insurance for me?
What else do I need to know about Life Insurance?
How do I get a Life Insurance Quote?
How do I choose the right policy for me?
What if I need cover to be arranged quickly?
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How are premiums calculated?
What if I have to make a claim?
Do I need Mortgage Life Insurance instead?
Should I consider Critical Illness cover?
What other sorts of Insurance should I think about?
How do I make a complaint?
What do I need to know about the law and Life Insurance?
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