January 10, 2005
The Financial Services Authority brings in new rules about insurance policies:
New insurance regulations which come into force on
Friday will lead to higher premiums, the chief executive of the UK's
largest insurer warned yesterday.
Patrick Snowball, of Norwich Union, slammed the changes which will see 36,000 companies come under the regulation of the Financial Services Authority (FSA), accusing the watchdog of unnecessary red tape and creating a "gold plated level of regulation".
We can argue about whether such regulation is a good thing or not another day. This is the bit that got me:
He said the industry would pay around £215m to come
under its umbrella, but "the overall cost, considering the vast size of
the industry, is not that great".
The spokesman admitted the cost of complying will be about £2.80 a policy. He added: "It is not necessarily passed on to the consumer, but it is up to insurance companies how to deal with it."
Ïf it’s not the customers paying it then who the hell is? It’s too early in the day to go into vast amounts of theory, but there just isn’t anyone else to carry the cost. Think that perhaps the greedy capitalist shareholders will bear it? (Leave aside the mutual insurers, who don’t have them.) All that will do is lower the returns to capital, mean the industry will attract less in future, thus put prices up to customers.
That’s what angers me, a spokesman for the regulator, someone who should actually know these things, making such a dunderheaded statement. There is no one other than the customers who could ever pay such costs.
My advice to insurance companies is to simply add a 2.80 surcharge to each policy and call it the FSA tax. Sorry old boy, but this is what the paperwork costs us, write to the FSA if you don’t think it’s worth it.
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hey u can jsut make the govarmet pay it! than u pas the cost to the taxpairs! who arnt nesesarily costomars! an that fixas evrythign.
Posted by: HA HA HA | Jan 10, 2005 3:13:12 PM