This article sets out the current regulatory position of participants in the UK general insurance market, and explains how that is about to change. It does not deal with the position of those involved in the life insurance market, which is in some respects different.
Insurers
Under the Financial Services and Markets Act 2000 ("FSMA"), the activities of "effecting" and "carrying out" contracts of insurance as a principal in the UK by way of business are regulated activities. These activities include (but are not limited to) the underwriting of insurance and the payment of claims. It is a criminal offence to carry on those activities without authorisation from the Financial Services Authority, subject to certain exemptions and exclusions. Unauthorised insurance contracts are also, generally, unenforceable by the "insurer".
What constitutes a "contract of insurance" is not defined by statute and it is necessary to look to the common law....
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