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15/04

20 February 2004

Mortgage and general insurance - transitional provisions for consumer complaints

Following public consultation, consumer complaints in relation to firms covered by the Mortgage Code Compliance Board (MCCB) and General Insurance Standards Council (GISC) will be transitioned to the Financial Ombudsman Service (FOS).

At present complaints about products bought from firms covered by the MCCB and GISC are dealt with through independent arrangements set up by those bodies. After regulation comes into effect, complaints about products will be dealt with by the Financial Services Authority (FSA).

Financial Secretary Ruth Kelly said:

“These arrangements will benefit consumers by providing a seamless transition to regulation - with no gap in consumer protection, and provide certainty for the industry. The arrangements were overwhelmingly supported by respondents to the consultation.”

FSA regulation of mortgage business will be implemented with effect from 31 October 2004, and FSA regulation of general insurance from 14 January 2005.

Notes for editors

1. On 22 September 2003 the Treasury published the consultation paper “Mortgages and General Insurance Regulation: Transitioning Complaints. This paper sought views on whether the Financial Ombudsman Service (FOS) should be given powers to deal with complaints about products bought before FSA regulation commences but which come to light afterwards.

2. Following representations, the Treasury is taking this opportunity to make a further clarifying amendment to the legislation bringing general insurance into regulation. This amendment will ensure appointed representatives of FSA authorised persons will be able to conclude all contracts of insurance, with the exception of qualifying contracts of long term insurance and long term care insurance products.

3. Further details on the Orders, Consultation document , Summary of responses, and the Regulatory Assessment can be found on Transitioning Complaints - Consultation Document

4. Media enquiries: please contact the HM Treasury Press Office on 020 7270 5238

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