FSA Chief Urges Insurers To Continue To Address Conflicts Of Interest

by Robin Pilgrim, LawAndTax-News.com, London

13 April 2005

Speaking at the inaugural insurance sector conference hosted by the UK's Financial Services Authority last week, chief executive John Tiner told attendees that the regulator believes that the industry is capable of managing conflicts of interest.

Mr Tiner explained that the FSA believes that mandatory commission disclosure would not remove the need for firms to manage conflicts of interest arising from their business.

"Full disclosure would not be a panacea, nor provide a safe harbour from the need to manage conflicts: they would still be present and they would still have to be managed. The management of conflicts is not the responsibility of the regulator: our responsibility is to set the principles… and assess compliance with our principles. We are doing that right now through our work on conflicts management and if we find serious breaches or ignorance of our requirements we will take appropriate action against the firms and individuals involved," he announced, continuing:

"Management responsibility lies with the people in the firms. It lies in the culture of the firms, in the operations of the firms and in the business models of the firms."

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