Some prospective members of the PIA, which will publish its prospectus today, are concerned at the extent of influence held by the banks and the building societies.
The seven bankers on the board include Joe Palmer, who was a director of Halifax Building Society before he became chairman of the PIA last year. Mr Palmer is more closely identified with the insurance industry. He spent many years with Legal & General, where he was chief executive from 1984 to 1991, and he is a former chairman of the Association of British Insurers. Despite this, the PIA regards him as a public interest director.
The PIA directors representing financial services are Ken Bignall, managing director of Barclays Financial Services, Lawrence Churchill, chief executive of National Westminster Life, and Geoff Lister, chief executive of Bradford & Bingley Building Society.
Of the public interest directors, Sir Terry Heiser is a director of Abbey National, Sir Leonard Peach is a former director of Nationwide Building Society and David Llewellyn is a former member of the London Advisory Board of the Halifax Building Society.
Banks and building societies were reluctant to support the PIA, which will replace Fimbra and Lautro, the existing regulators responsible for financial advisers and the life insurance and unit trust markets. But the Securities and Investments Board, the senior financial regulator, won many of them over when its chairman, Andrew Large, demanded a 'step change' in regulatory standards. This forced the PIA to re-examine its approach to regulation. In the ensuing delay, many of the key arguments were over the composition of the board.
This eventually led last month to Standard Life, the largest mutual life office, withdrawing its support for the PIA and joining Prudential Corporation's call for a move to full statutory regulation.
Standard Life is concerned that the PIA's practitioner directors will be outnumbered by public interest directors and the PIA's chief executive, Colette Bowe. It believes this constitution lacks proper accountability and contravenes the self-regulatory basis of the Financial Services Act, which underpins the UK's system of investor protection.
The PIA intends to start life with 21 directors but is still seeking a tenth public interest director.Reuse content