The FSA has published their August 2010 Handbook Development Newsletter which covers the following topics:

• Information about recent Handbook-related and other developments;

• Information about recently issued Handbook-related and other publications;

• An updated timetable for forthcoming publications;

• Information about Consumer publications; and

• A link to the FSA Events web page which provides information about forthcoming conferences and training events.


Source: Financial Services Authority

FSA Website

In the past week, the following areas have attracted regulatory action:

• Action against two mortgage brokers whose reckless business practices allowed false and misleading mortgage applications to be made to lenders.

Click here for further information

• Action against a firm for failing to have sufficiently robust compliance arrangements for the investment advice given to customers using platforms and discretionary portfolios. An investigation found the firm did not ensure its compliance arrangements evolved as the business grew. As such, the firm did not have robust arrangements for training advisers and ensuring suitability reports were clear, fair and not misleading. The firm also recommended platform-based investment to 519 customers but failed to ensure its advisers explained their rationale clearly to investors.

Furthermore, the firm didn’t ensure its advisers understood the reasons for making such a recommendation. The FSA also found that the firm had not made it clear to customers that some of the underlying investments contained Unregulated Collective Investment Schemes (UCIS) and the associated risks that needed to be understood prior to investment.

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• A lifetime ban on an individual for failing to segregate and protect money from clients’ insurance premiums.

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Source: Financial Services Authority

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Source: The Consulting Consortium

TCC Website

The Financial Ombudsman News is always awaited by complaints staff as it gives valuable insight into the Ombudsman’s thinking. This latest edition covers the following areas:

• Disputes over the quality of repairs arranged as part of an insurance claim;
• A reminder of the FOS approach to mortgage-underfunding cases;
• Complaints data – how, why and what FOS will be publishing in September; and
• Natalie Ceeney, chief executive and chief ombudsman, taking stock of recent trends in the FOS workload – and focusing on strategic plans for the future.

Disputes over quality of repairs
Although many of the insurance complaints FOS see require them to resolve disputes about whether or not a claim should be paid, in a sizeable number of cases the actual payment of the claim is not at issue. The insurer has already agreed to pay – but a dispute has then arisen over the repair or restoration work authorised by the insurer, in connection with the claim. This selection of recent case studies illustrates some of the insurance complaints FSO have dealt with recently where the consumer has been unhappy with the overall quality of such work – or with what they consider to be unreasonable delays in getting the work completed.

Mortgage under-funding cases
FOS technical advice desk has recently seen a rise in the number of calls about FOS approach to mortgage underfunding – where a lender has calculated mortgage payments incorrectly. This is not a new area for FSO. Each year FSO deal with a large number of disputes involving situations where this has happened. In these cases, the consumer usually complains that they had been paying the amount quoted by the lender but were then shocked to find that the outstanding mortgage balance was more than they had originally been told.

The FOS approach to compensation in these cases is not new. Almost ten years ago, in issue 3 of Ombudsman news, FOS set out how we deal with cases involving mortgage underfunding. FOS long-standing approach also forms the basis of the information about mortgage underfunding that they have published as part of the online technical resource on the FOS website.

Given the recent interest in how FOS deal with mortgage underfunding complaints, FOS have summarised that technical note for this issue of Ombudsman news.

Complaints data
In September 2010 FOS will be publishing the latest set of complaints data relating to named financial businesses. The data will show the number of new complaints they received – and the proportion of complaints they upheld in favour of consumers – for each business that had 30 or more new cases (and 30 or more resolved cases) referred in the first half of 2010.

FOS first published this type of data – naming the 150 or so businesses that together generate around 90% of the FOS complaints workload – in September 2009.
This followed extensive public consultation – and the unanimous decision of the FOS board to make this information publicly available, to encourage businesses to:

• Benchmark their standards of complaints-handling against others in the financial services industry;
• Learn from businesses who are handling complaints better; and
• Reduce the number of unresolved complaints referred to the ombudsman service.

Before this, the ombudsman service had already been making this information available privately to the largest financial services groups.


Source: Financial Ombudsman Service

FOS Website

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Source: The Consulting Consortium

TCC Website

There are more than two years to go before the new Solvency II regulatory regime is implemented, but Lloyd’s is already well underway with its plans to ensure the market is ready for the far-reaching changes.

Solvency II will see the biggest shake-up in the way Europe’s insurance industry is regulated in three decades. The new rules are aimed at increasing insurers’ financial stability by introducing more sophisticated capital-setting requirements that take better account of the risks that companies face. The new regime, which will be implemented at the end of 2012, will replace the patchwork of differing rules that currently exist across the continent.

Although the framework was adopted by EU member states in April 2009, the detailed proposals have still to be worked out. Insurers are currently testing the latest draft rules in what is known as the fifth quantitative impact study, or QIS5. Lloyd’s has played an important role in discussions about what form the new rules should take and its 80-plus syndicates will take an active part in QIS5, using its proposed standard formula to work out what their capital should be.

“It is an enormous task. Although Solvency II’s implementation is still some way off we are doing a lot of work now to make sure we are ready,” says Paul Appleton, Senior Manager of Lloyd’s Market Finance and the man leading the market’s Solvency II efforts.


Source: Lloyd's

Lloyd's Website

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Source: The Consulting Consortium

TCC Website

The Financial Services Compensation Scheme has announced that no decision relating to Kaydata investments backed by Lifemark SA.

Following recent reports, the Financial Services Compensation Scheme said it has not yet concluded its investigations into the potential liability of Keydata for investments backed by Lifemark SA. No decision has yet been made and it is premature to say the Scheme will not compensate consumers until these investigations are completed.

The FSCS expects to confirm its position during September for those who hold investments backed by Lifemark SA. They will do all we can to provide certainty around the position of the FSCS as soon as we can.


Source: Financial Services Compensation Scheme

FSCS Website