Liddell reads riot act to insurance chiefs
Thursday 15 May 1997
The Minister told executives of the 28 worst offending companies that continuing delays in offering redress to those who were mis-sold personal pensions were "completely unacceptable".
During a terse 20-minute meeting, Mrs Liddell added that continuing lack of commitment on the part of insurance companies would result in far tougher regulations being introduced as part of the Government's planned reforms of the financial services industry.
Mrs Liddell, who was flanked during the meeting by Colette Bowe, chief executive of the Personal Investment Authority, the frontline financial regulator, said she fully backed the PIA's latest deadline announced on Tuesday for compensating victims of the scandal.
But Mrs Liddell added that she expected most firms to settle their cases well before the new target for all urgent cases to be resolved by the end of December 1998.
The Minister said: "Investment firms have seriously underestimated the depth of public anger about this. It is the ordinary man or woman in the street who is being hurt by their foot-dragging.
"The Government is clear that this dilatory behaviour is unacceptable. It will not be tolerated. Let there be no misunderstanding. Failure to deliver them will have serious consequences for the industry."
Mrs Liddell's unprecedented summoning of insurance industry leaders follows growing anger among consumer organisations and trade unions at delays in dealing with the problem.
The review follows a report in November 1994 from the Securities and Investments Board, the City's leading regulator, which said up to 1.5 million people may have been mis-sold a personal pension.
Of these, the SIB said, some 500,000 were urgent cases because those affected were already retired, close to it or were among categories most likely to have suffered heavy financial losses.
The Personal Investment Authority originally set a target of December 1995 for the most urgent cases to be dealt with. But its regular pronouncements on pension compensation have been ignored by most companies involved.
Figures released on Tuesday by the PIA showed that barely 10 per cent of urgent cases had been dealt with and compensation offered to just 20,000 people. Some of the UK's best-known insurers, which include Britannic and Royal Insurance, are among the slowest in offering redress to clients.
Mrs Liddell's intervention was yesterday being seen by senior regulatory sources as a sign that ministers had finally lost patience with insurance companies and with the PIA. An industry source said the "name and shame" policy was considered by Ms Bowe at the PIA last year - and then rejected, supposedly on legal grounds.
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