FSA publishes Retail Conduct Risk Outlook
The Financial Services Authority (FSA) has published its first Retail Conduct Risk Outlook (RCRO), which examines how a range of current, emerging and potential risks could impact customers.
As a key component in the regulator’s consumer protection strategy, the RCRO report seeks to identify current and upcoming risks by analysing the environment in which the FSA, authorised firms and consumers operate.
It therefore assesses the main macroeconomic trends, the changing regulatory landscape, developments in firms and markets, and key issues affecting consumers.
On the insurance sector, the report states that life insurers are considering how to change their business models and product mix to alleviate pressures on their long-term prospects – for example, by targeting the changing needs of the pre-retirement market.
Insurers are also responding to a number of large-scale regulatory initiatives, which will have a significant effect on the way they do business.
In addition to the Retail Distribution Review and Solvency II, other regulatory changes that may affect the structure of the insurance sector include increased capital requirements for Personal Investment firms and pension reforms, the report states.
The review concludes that the combination of all these changes may have a significant impact on the business models of firms, which could lead to conduct risk arising for consumers of the impacted businesses.
Category: Financial Services Authority News, Insurance News, Life Insurance News
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