Companies selling insurance which are not registered with the Financial Services Authority (FSA) will now be permitted to sell or even offer advice on products.
Everyone involved in insurance-based products is affected – retailers, repairers, carmakers and also fleet suppliers such as leasing companies.
Services affected could include GAP insurance, early termination insurance and even breakdown cover.
The FSA wants to raise standards of professionalism in a market that suffers from a poor image with consumers.
Retailers have three options – become fully authorised to sell and advise on all insurance-based products; become an ‘appointed representative’ (AR) for one or more providers to sell only the products they supply; become an ‘introducer’ and have a passive display of leaflets promoting insurance-based products.
It is likely that leasing companies wanting to continue to sell insurance products, likely to be GAP and early termination, will follow the AR route.
At Alphabet, Richard Schooling and all key staff have tackled new training programmes and examinations to give them the vital qualifications they need. One training document alone runs to 142 pages of essential training to meet with FSA approval.
The question facing fleets is whether all their suppliers are fully qualified.
If not, it could lead to dangerous interruptions in the provision of key services, including insurance cover.
Costs for training just one person can run into thousands of pounds. Suppliers are also having to deal with major changes introduced in the Consumer Credit Act, which create strict guidelines on how suppliers, such as leasing companies, can advertise pricing details to customers.
Importantly, if a supplier is advertising within an employer’s premises, the employer itself can become liable for any breaches of the new rules.
Schooling said: ‘We deal with some customers’ drivers under their corporate banner, therefore we have to ensure that we are trained and that we comply with any new legislation.’