BUSINESSES across Hampshire involved in the sale of insurance policies for products or services they provide are being warned that they could face prosecution from next year unless authorised by the Financial Services Authority.

From January, new regulations by the watchdog will come into force which potentially apply to a wide range of businesses.

They include retailers, mobile phone sellers, car dealers, antique dealers, doctors, dentists, vets, car hire firms and removal and freight forwarding companies.

The rules could also apply to housing associations, surveyors and estate managers who arrange buildings insurance, and extend to trade associations, sports clubs, employers and unions who offer insurance to employees and members.

Businesses which either advise on, administer, arrange or deal in contracts of insurance where it is secondary to their main business will have to be either regulated by the FSA or come within a specified exemption by January 14, 2004.

Examples include motor insurance deals on vehicle purchases, mobile phone cover, payment protection cover on loans and credit, car hire insurance and dental, health or pet insurance.

Without an FSA authorisation or an exemption, the selling of insurance will be a criminal offence. And with applications for authorisation taking up to six months to process, businesses are being urged to check whether the new rules apply to them before it is too late.

The warning has come from Tony Woodward, head of the financial services regulation team of commercial law firm Bond Pearce, which employs almost 170 staff in Southampton.

He said: "These new laws are a potential minefield for a wide range of businesses and time is running out if they want to meet the January 14 deadline.

"There are some exemptions, such as extended warranties on electrical goods and travel insurance in certain circumstances, but there is a plethora of other activities that are covered.

"We're advising our clients tocheck if the laws apply to them as soon as possible and seek advice if they are unsure because the penalties include fines and in extreme cases imprisonment."