Confused by FSA situation

[NinjaStory]

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Hi

I've recently written a very comprehensive business plan (approx. 12,000 words) with the intention a new yet sufficiently divergant (an improved) car insurance comparison web site. I'm aware this is an already saturated market however if we could put that to one side for now as if I cannot sort out the situation with the FSA (Financial Services Authority) then that would be irrelevent.

Essentially, I understand that whilst I am not providing insurance or physically taking money from a customer, by presenting a list of options available I am therefore 'advising' on insurance products and therefore must be authorised by the FSA.

Firstly, I believe there is a non-refundable application fee of between £500 and £1,500 (for a small, non-complex business). Whilst this is a start-up cost I could do without, I would be prepared to pay out if I felt I had a good chance of acceptance.

However, there are a few other stipulations that have me confused. I just have a few questions, and I'd appreciate some help:

1. I assume that running such a business without FSA authorisation would be illegal. Can anyone confirm this?

2. Is there any scenario in which I may be exempt from requiring authorisation?

3. FSA guidelines state that the management must be 'fit and proper'. What does this mean? Is it a reference to legal / business history or do I need a relevent qualification and / or experience in the insurance business to trade?

4. There is also a reference to the quality of 'systems and controls'. What does this mean?

5. Would it be possible to set-up under the banner of an already authorised organisation and trade that way?

6. Is there anything I can do to make the process less expensive / painstaking?

I would really appreciate any advice.

Thanks

J

[JMJ]

I would recommend you put the same questions directly to the FSA at:

perimeterguidance@fsa.gov.uk

[HoTMeLter]

I have recently had a nasty encounter with the FSA and perimiter guidance told me one thing while the enforcement division who were considering legal action (and strongly advised me to seek legal advice) told me the complete opposite.

To be honest they are really not geared up toward the aff market and there are so many grey areas.. - especially in section 19 regarding contracts of insurance

The cost of getting registered would be more like 5k plus from what I have been told but once registered you would be entitled to NOT pay the vatman on revenue regarding to insurance (or claim vat on purchases relevant to insurance such as seo etc etc).

5. Would it be possible to set-up under the banner of an already authorised organisation and trade that way? - Yes this is possible, they would obviously have to approve all content. You could effectively build your site with them and then subsequently "rent" your domain to them on paper while you pay them a % of earnings (as an example) - This is a workaround as I know it has been done before.

If you want to pm me feel free..

[tumalty1980]

Hi there, I think you may be better directing your question to the FSA or a corporate solicitor with FSA experience.

I may self have experiance with the FSA applied for registration for a site similar to your but dealing exclusively with Business Insurance and Liability Insurance. After many phone calls and letters they told me I did not fit their criteria of "Fit and Proper" because of a 1999 conviction for Obstruction of Justice

Given the fact that FSA application fees are none refundable it may be a wise investment to pay a corporate solicitor to advise you on whether your application is likely to be approved or not.