February 3, 2012
Small business insurance holders have been warned that they could be facing additional costs after the Financial Services Authority (FSA) announced an increase in its funding requirement.
The organisation's funding requirement has leaped by over £500 million this year as the FSA deals with plans to re-structure in 2013 and overhauls its IT infrastructure.
Hector Sants, FSA CEO, commented:
“The FSA will continue to deliver intensive and intrusive supervision and develop the key policy initiatives but we are not planning any new discretionary initiatives.”
The Director General of the Association of British Insurers (ABI), Otto Thoresen, has suggested that this move could have a significant impact on small business insurance customers as insurers attempt to make up for increased outgoings as a result.
He added:
"We knew that there would be a cost involved in moving to twin peaks regulation, but in this difficult financial environment all organisations need to be focussed on controlling their costs."
Mr Thoresen went on to say that insurers will do their best to absorb the costs. In spit of this he also added that some costs will have to be "passed on to the small companies and private individuals who are customers of the insurance industry at a time when they can least afford it."
