16 October 2002
Mortgage and general insurance regulation to come into force in October 2004
Following the adoption of the Insurance Mediation Directive (IMD) by the European Parliament Ruth Kelly, Financial Secretary to the Treasury, today confirmed that the regulation of mortgages and general insurance will come into force from October 2004.
Ruth Kelly said:
“I am happy to confirm that both mortgages and general insurance regulation will come into force simultaneously. Following consultation and publication of the final Orders on mortgages, and the adoption by the European Parliament of the IMD, the date by which this will be achieved can be confirmed as October 2004.
“Regulation will ensure that a high standard of advice is available across the board to a large number of people, including in excess of one million people who take out mortgages every year. The government will be working closely with the industry and others to design a regime that is targeted precisely at maximising benefits to the consumer, and not loading industry and ultimately the consumer with unnecessary costs.”
The UK will have two years to implement the Directive from the date it is published in the EU Official Journal. If there is a significant delay before the IMD is published in the Official Journal, the Government will reconsider the timetable.
Treasury will shortly be publishing a consultation document and Draft Orders on general insurance regulation.
Notes to editors
1 Ruth Kelly announced the decision to regulate general insurance and mortgage advice on 12 December 2001. (HMT PN 140/01).
2 The final Orders on mortgage regulation were published on 8 August 2002 and are available from the Treasury website www.hm-treasury.gov.uk.
3 The Insurance Mediation Directive is available from the EU website.
4 The Treasury will shortly be publishing its proposals for regulating general insurance.
5 A timetable is attached.
6 For media enquiries please ring HMT press office on 020 7270 5238.
Regulating of Mortgages and of General Insurance
| MORTGAGES | GENERAL INSURANCE | ||
| 2002 | Feb | Draft legislation published for consultation (end month) | |
| March | FSA Guide for intermediaries published(A short information guide produced specifically for firms not already authorised by the FSA and designed to provide an explanation of the FSA consultation process etc.) | ||
| August | Legislation published in final form on 8 August.FSA consultation started on 12 August. This included near final rules in limited areas where consultation in CP98 was judged sufficient. | ||
| 30 Sept | Insurance Mediation Directive Adopted by European Parliament and Council of Ministers under the co-decision procedure | ||
| Oct | Draft legislation published for consultation | ||
| Nov | FSA consultation starts | ||
| Dec | FSA consultation addressed to both sectors and covering issues relating to meeting the threshold conditions for authorisation etc.FSA consultation on Appointed Representatives Regime | ||
| 2003 | Q1 | Legislation in Parliament | Legislation in Parliament |
| Q2 | FSA consultation on conduct of business rules | FSA consultation on conduct of business rules | |
| H2 | Final FSA rules published | Final FSA rules published | |
| 2004 | |||
| October | Legislation becomes effective – firms have to be authorised by this date, and FSA rules come into effect. | ||