Abstract
World over, the changing economic environment with characteristics such as globalization, deregulation, demutualization, and consolidation are throwing newer challenges to the insurers. UK with the third largest insurance industry in the world with 9% of global premium is also impacted.

The happenings in the UK insurance market have not been very encouraging with scandals and failures that, on one hand eroded consumer confidence and on the other hand made the availability of safe and secure insurance availability a matter of chance. Such a milieu resulted in the British Government to initiate a reform in the regulatory structure leading to the creation of Financial Services Authority (FSA) on 01 December 2001 vide the Financial Services and Market Act 2000. FSA is designated as the apex body for regulating the entire financial services businesses including insurance.

This paper dwells on the various incidents in the UK insurance market that led to these regulatory changes, the impact of the proposed regulatory regime, the future trends, and how insurers could harness the power of information technology to make compliance easier.

Author Subhobroto Ghosh

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