Hardly had the ink dried on a letter by the insurance regulator Financial Services Authority (FSA) to chief executives, when the politicians changed the name again.
It was originally announced that the FSA will, by late 2012, be replaced by two separate regulators, the Prudential Regulation Authority (PRA) and the Consumer Protection and Markets Authority (CPMA). The process of implementing the new regime will begin on April 4, when a Prudential Business Unit (PBU) and a Consumer & Markets Business Unit (CMBU) will replace the FSA's current Supervision and Risk business units. The CMBU will eventually become the CPMA.
If you are still with this and have not nodded off due to complete indifference that it will be little more than the same people in the same building with a new name, more confusion follows. A few days after insurers thought they had understood the tediously long details from the FSA, the game plan changed.
Financial Secretary Mark Hoban announced that the new regulator tasked with overseeing insurance, originally to be called the Consumer Protection and Market Authority (CPMA), will now be called the Financial Conduct Authority (FCA).
Hoban says the FCA will be charged with increasing and fostering competition in the market and the Treasury is considering giving the regulator joint jurisdiction over internal competition enquiries, currently handled by the Office of Fair Trading.
The FCA will have the primary objective of promoting confidence in financial services and markets, with particular focus on ensuring that consumers of financial services are protected and that financial markets work effectively.
The government aims to establish the new regulatory structure by the end of 2012. Subject to Parliamentary timetabling, legislation will be introduced later this year and should achieve Royal Assent in mid-2012.
The FCA will be able to ban products, withdraw financial promotions, limit their distribution for up to 12 months, and publish the names of companies under investigation even before the target can defend itself to an internal appeal body. Lawyers are already challenging the publication plans on the grounds that it is against natural justice to insinuate that a company is guilty, even before they have admitted guilt or claimed innocence.
Apparently, the name change came about as a result of internal concerns that anything with the words ”consumer protection ‘in the name might be too consumer friendly and seen as prejudiced against banks and insurers. Silly me-I thought the idea was to protect consumers.
The similarity between FSA and FCA is a bit close for comfort. I see another government U-turn or two coming.