MPs also questioned the suitability of Joe Palmer as chairman of the Personal Investment Authority, the body that is supposed to take over Lautro's responsibilities for investor protection. Legal & General was recently fined pounds 180,000, then a record, for failures that took place while Mr Palmer was the insurer's chief executive.
Barry Sherlock, Lautro chairman, said he was confident Mr Palmer would have learned from the incident. 'The reality is that, as a result of the work that Lautro has done, no single company has a totally clean record,' he added.
Mr Sherlock rejected the suggestion that Lautro had failed, but accepted that the life industry had caused investors serious problems.
MPs questioned the time Lautro had taken to get to grips with the problems caused by home income plans and personal pension transfers. In the light of the pensions scandal that has since emerged, Kit Jebens, Lautro's chief executive, said he wished the regulator had issued guidance before July 1992.
Diane Abbott, the Labour MP for Hackney North and Stoke Newington, who had earlier accused Mr Jebens of 'psychobabble', said: 'You have sounded throughout this evidence (like) representatives of the industry. You have paid lip service to the consumer.'
When talking about monitoring advertisements, Mr Sherlock said one had to be careful that 'the regulator is not too regulated' for fear of stifling initiative.
When Ms Abbott cited Consumers' Association evidence that the life industry was characterised by incompetence, greed, arrogance and fraud, Mr Jebens said: 'I thought that's what we have been saying to you.'
Mr Sherlock reduced the committee to laughter when he said life insurance companies 'do disclose (policy) expenses but not in a form which is comprehensible to consumers'. The regulators had not found a successful method of disclosure.
Mr Jebens said the most important thing was not 'paper disclosure' but what went on between salesmen and clients. Lautro had tried to raise standards through better training.Reuse content