Insurance industry should consider its own misdeeds as it bays for blood

 

Outlook: The insurance industry has scented its regulator’s blood and is positively drooling as a result. Its representatives want the Financial Conduct Authority’s (FCA) chief executive, Martin Wheatley, served up on a plate.

In case you missed it, the FCA’s director of supervision, Clive Adamson – the man who approved the disgraced Paul Flowers’s appointment as chairman of the Co-op Bank – blew the lid off plans for a review into the 30 million or so pensions and life insurance savings policies sold from the 1970s to 2000 in a press interview at the end of last week.

In short order, the thick end of £2.5bn was wiped from the sector’s shares as investors fled. It took six hours of market turmoil before a clarification was issued when the watchdog said it wouldn’t demand a review of all 30 million. It just wanted to be sure policyholders were being treated fairly.

The shares duly recovered (a bit) and a board-level investigation was announced into the FCA’s handling of the affair.

To add a bit of spice to the pot, it has just emerged that the watchdog is angling for a  3 per cent increase to its budget as part of its business plan.

One thing you can be sure of: just about every life insurance industry executive in Britain will be streaming Parliament TV live when Mr Wheatley next appears before the Treasury Committee. Its members don’t really go in for bear-baiting these days. This may be an exception.

But resign? Please. Cast your mind back. When was the last time you remembered a life insurance executive resigning as a result of something going wrong on their watch?

This, remember, is an industry that for many years treated consumers as marks to be ripped off, overcharged and generally mistreated. The interests of the shiny-suited salesmen that flaunted insurers’ wares often appeared to be of far more concern to them than the outcomes for their customers.

If there’s to be blood on the floor as a result of this affair the amount will resemble what you get from a finger prick compared to the vats life insurers spent years sucking from their unfortunate clients.

Things have been better recently, it’s true. Products are simpler, charges more bearable. But the industry had to be dragged kicking and screaming to get to this point.

Even then, it still has the capacity to behave shamelessly. Remember the way Prudential botched its attempt to take over the Asian insurer AIA? That cost shareholders hundreds of millions in break fees and led to a £30m fine because the company failed to let the Financial Services Authority know what was going on. What, you might ask, happened to the chief executive, Tidjane Thiam, as a result of all this? He got a bonus. 

Mr Wheatley has admitted this was not the FCA’s finest hour and that’s an understatement. The watchdog has egg all over its face and questions to answer. At the very least Mr Adamson had better not get a bonus this year. The same goes for others, too, if the FCA wants to set an example to the firms it regulates. 

But if the insurance industry people calling for Mr Wheatley’s head had any self-awareness they would realise that they are guilty lobbing bricks from glass houses.

Now its SocGen’s turn in  the crosshairs over Libya

 First it was Goldman Sachs, now SocGen finds itself in the legal crosshairs of the Libyan Investment Authority (LIA) over work done during Colonel Gaddafi’s misrule.

The Independent first revealed that the French bank would be the LIA’s second target in February and details of its claim have now been filed in the High Court. As expected, it makes for eye-opening reading. SocGen stands accused of helping to funnel bribes to close associates of Saif al-Islam, son of the late, unlamented, Colonel as part of its work for the LIA, Libya’s sovereign wealth fund, at the time.

As with Goldman, SocGen has trashed the claim and said it will contest it vigorously.

So the game of legal poker is now formally under way, but the hand will take an awfully long time to play out. Standard practice for banks facing any legal claim is to delay, obfuscate and generally tie the process up in red tape in the hope that their opponents run out of resources and/or energy.

The problem for the banks is that the LIA has an ace card in the hole: its ability to put yet more lurid allegations before the courts. The reporting of legal proceedings carries privilege. So those claims can be aired in public if this gets to court, and it doesn’t matter how outlandish the banks say they are (as long as their side is given a fair shake).

The difficulty facing the LIA, however, is that the banks may feel their reputation has sunk to such a degree that a little more dirt won’t matter all that much.

News of bonus cuts can’t be an April Fool – can it?

Britain’s biggest companies have, it seems, come over all conservative when it comes to bosses’ pay.

An analysis by the accountancy firm PricewaterhouseCoopers has found that companies with accounting year ends of  30 September 2013 paid bonuses averaging 1 per cent lower than in 2012. This, it says today, is the third consecutive year of  bonus cuts. Median total pay, including long-term incentive payouts that aren’t always very long term and are often used to quietly top up executives’ packages, increased by just 0.5 per cent.

Now, I’ve no reason to doubt the good accountant’s findings. But releasing such counterintuitive information on 1 April seems odd.

Sport
The giant banner displayed by Legia Warsaw supporters last night
football
News
i100(and it's got nothing to do with the Great British Bake Off)
News
news
Sport
footballPremiership preview: All the talking points ahead of this weekend's matches
PROMOTED VIDEO
News
Angelina Jolie with her father Jon Voight
people
Arts and Entertainment
Tulisa as a judge on the X Factor in 2012
tvLouis Walsh confirms star's return
Life and Style
fashionClothes shop opens on Bill Clinton Boulevard in Pristina
Voices
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
News
i100
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Project Manager - Pensions

£32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...

KYC Analyst, Birmingham - £200-£250 p/d

£200 - £250 per day + competitive: Orgtel: KYC Analyst, Key Banking Client, Bi...

Test Manager - Banking - Yorkshire - £450 per day

£400 - £500 per day: Orgtel: Test Manager - Banking - West Yorkshire - £400-£5...

SAS Developer - DI Studio - Banking

£450 - £500 per day: Orgtel: SAS Developer, Chester, Banking, DI Studio, £450-...

Day In a Page

Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone