New FSA rules Leave Many Unprepared |
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 Most insurance companies' IT systems will struggle to cope with the requirements of the FSA's new control procedures, according to a survey of insurance industry management.
The FSA's new regulations came into effect on 14 January 2005, taking over from the General Insurance Standards Council (GISC).
A survey of 200 general insurers and brokers, carried out by solution provider Docucorp, indicates many IT systems will not be up to the task.
Opinion is that the FSA has not taken into account the extent of the preparations those insurers and brokers have to make.
According to the report, 92% feel the FSA has underestimated the cost of implementing the new requirements, 96% feel firms will not be compliant in ime, and 77% think it presents a major IT challenge.
Under the new guidelines firms must be able to access information within 48 hours and 86% of the respondents say their existing systems would not be able to cope.
The 14th January deadline also means it is now illegal for a firm whose activities fall within the FSA's scope to trade without authorisation.
It is assumed that companies will initially cope by adapting existing systems but long-term compliance will only be achieved by implementing new applications with well established compliant procedures.
Docucorp plans to carry out a follow-up survey to gage industry progress. Managing Director Tracey Robinson says "We need to wait until compliance checks start though, Firms are standing back to see what happens to companies that are caught out by the FSA, and it could be years rather than months before we see the majority of firms adhering to these new regulations."
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