FSA inspections "inadequate"

The Financial Services Authority (FSA) should look more closely at its knowledge base of how the private medical insurance (PMI) market works, a prominent broker has said.

Susan Colley, principal of West Country Health Care, said the knowledge of the PMI market currently held by FSA inspectors was inadequate. She said: "I had a visitation from the FSA last week and it became patently obvious that the inspectors' knowledge of the PMI market is limited.

"I cannot stress strongly enough that this telephone assessment of PMI brokers is a total waste of time. You cannot assess what we do as specialists in an hour over the phone by someone with no knowledge of the market. So the FSA should wake up, smell the cordite and rearrange its thoughts."

She added: "The two inspectors wanted to see all my files on management information. After twenty minutes, they turned to each other and wondered why they were there.

"When I was interviewed on the phone by the FSA, I was criticised for something I did and I asked how I could sort it out. I was referred onto ICOB rule 4 but the two inspectors that turned up just looked blank at this."

She added: "ICOB makes no sense at all unless you are immersed in that language all day, everyday. It makes no sense to the PMI broker at the workface. The regulator should listen more to us and adapt the rules. Hector Sants is now saying that it is 'outcomes-based' - they should have looked at this in more detail because all it has done is waste time."

Mike Izzard, chairman of the Association of Medical Insurance Intermediaries, offered a more temperate response. He said: "Well, I wouldn't go so far as to say that I agree but the FSA don't know an awful lot about PMI, and PMI brokers are probably guilty of that because they don't interact with them awfully well."

He added: "Perhaps brokers being inspected for treating customers fairly (TCF) don't think its concept is moulded enough around the PMI brokers' needs. Well, maybe it's not, but we should try and educate them to see our point of view, but Rome wasn't built in a day."

He concluded: "We (PMI brokers) are slightly different from other brokers - we're in a pool of our own - but we can't expect special treatment just because of that."

When reached for comment, Robin Gordon-Walker, spokesperson for the FSA, said that the regulator would not comment on individual cases but insisted that all brokers were inspected in the same way.