In a statement to Parliament in December, Ruth Kelly MP, Economic Secretary to the Treasury, announced that the Financial Services Authority would eventually be the authority to carry out the statutory regulation of insurance intermediaries.
So what will happen to the General Insurance Standards Council? She acknowledged GISC's hard work in raising industry standards and said she would look to GISC to work closely with the FSA to develop a regime that understands the market, and is targeted precisely at maximising benefit to the consumer, without loading industry and ultimately the consumer with unnecessary costs.
It follows, therefore, that the GISC will be continuing its self regulatory regime for setting and enforcing good practice in the general insurance industry and providing important protection for customers until this role is taken over during 2004 by the FSA, when, importantly, it will no longer be a self-regulatory regime.
GISC has a membership of over 6,000 general insurance brokers and other intermediaries (who may be banks or building societies, travel agents, car dealers, and other types of retailers) plus all the major UK insurers. It sets, monitors and enforces standards in general insurance, the definition of which includes insurance products for individuals and their families, such as home & contents, motor, travel, medical, extended warranty and payment protection for mortgages and other loans.
Its website - www.gisc.co.uk - has a special section for consumers, as was mentioned in February's issue of Which? magazine in a feature on financial websites. Consumers visiting the site can learn what to expect from a GISC member, who GISC members are, and what to do if they have a complaint about their insurance.
GISC members must belong to either the Financial Ombudsman Service or the GISC Dispute Resolution Facility, and members must advise customers of the scheme to which they belong. Most insurer members belong to the Financial Ombudsman Service (FOS), while other members belong to the GISC Dispute Resolution Facility, which can be contacted on 0845 6012857 (calls charged at local rate).
GISC won't always be able to deal with a complaint but, where it can't, the helpline advisers will tell complainants if there is another course of action they can take. As a guide, GISC will deal with a complaint which concerns a general insurance policy for an individual, or which concerns a matter occurring on or after the date on which the member joined GISC.
GISC can only deal with complaints which relate to members of GISC, and cannot deal with those that relate to commercial or trade activity, are already the subject of arbitration or Court Proceedings, or covered by the Financial Ombudsman Service (which can also normally deal with complaints from small businesses with an annual turnover of less than £1 million).
"Our key message to consumers is that buying insurance from a member of GISC gives you important protection," explains Catherine Nicoll, Head of Communications, "so make sure your chosen provider has committed to our standards of good practice before you buy."
GISC's prime objective is to ensure general insurance customers are treated fairly. Assessing GISC's effectiveness in meeting this objective is the role of the GISC Scrutiny Committee. The Committee hosted a conference for consumer advice workers last December aimed at allowing delegates to share experiences and ideas with their counterparts, and to feed back the issues which they believed should be taken forward.
The conference was held shortly before the Treasury's announcement that regulation would eventually pass to the FS A, following which Scrutiny Committee
Chairman, Baroness Brenda Dean, announced, "The best interests of the consumer will continue to be at the heart of the Scrutiny Committee's work during transition to statutory regulation under the FSA. Our role is to ensure that there is both consistency and certainty for insurance customers in the short and longer term. We will maintain dialogue with the Consumer Panel at the FSA to share the benefit of the Scrutiny Committee's work to date, which has focused on identifying consumer expectations and perceived difficulties with general insurance. One of the statutory objectives of the FSA is to ensure that the regulatory regime secures the appropriate degree of protection for consumers, and the Scrutiny Committee will clearly be supporting this."
This commitment has been expressed personally to all the consumer organisations and delegates who attended the conference, including Gerry Lanchin, representing the National Consumer Federation.
For further information on GISC, please visit the website - www.gisc.co.uk - or call 020 7648 7807.
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