This rethink could reduce the costs of the Fos, FSCS maybe even doing away with the need for professional indemnity insurance, reduce capital pressures on smaller firms in particular and make the financial responsibilities that firms should have very well covered by an industry pledge.
It should mean no more firm failures, caused often by poor management and compounded by poor regulation and regulatory oversight.
A bit like Lloyds of London, keep it in house.
Their motto or pledge is "Fidentia" meaning confidence.
I am not sure if the FCA has such simplicity although it does have a mission?
The big difference being that confidence is based on historical fact, a mission is an expression of an ideal contained in thousands of pages of a rulebook that probably will not happen.
Not quite the same thing?
While Lloyd’s is adapting its ways and means of transacting claims, the process has essentially remained unchanged for years because it works.
In 1992 Lloyd's launched a lifeboat fund for the thousands of 'Names' (those private investors whose wealth secures Lloyd's insurance policies) who had, collectively, lost millions of pounds at Lloyd's as a result of a run of long tail, catastrophic claims, such as asbestos-linked claims or the Piper Alpha oil rig.
Just a thought.
Derek Bradley is chief executive of Panacea Adviser
