Insurers pile pressure on the Financial Conduct Authority

 

The Financial Conduct Authority came under fresh attack after the insurance industry’s chief representative told MPs that vital trust between industry, government and regulator was damaged by its disastrous handling of a probe into old life-insurance policies.

But Otto Thoresen, chief executive of the Association of British Insurers, said he was “not looking for heads to roll” over the affair, following calls from some in the industry for the leader of the Financial Conduct Authority, Martin Wheatley, to step down.

The controversy was sparked when the watchdog’s director of supervision, Clive Adamson, chose a press interview to announce a review of old life-insurance policies.

The move sparked a rout on the stock market, with insurers’ share prices plunging only to partly recover when the FCA issued a clarification over the scope of the review six hours later.

Thoresen today told MPs on the Treasury committee that the industry desperately needed “a relationship of trust between the regulator, the industry and the Government”.

“What we have had in this period has not been helpful towards that,”  he said.

“We didn’t have a press release. We didn’t have a report on which we could compare what was being said. Until we did it was very difficult.

“What we need to see is a regulator which is fair, which is balanced, which is objective.

“It is appropriate to have a bias to consumers. But it has to be in the right tone,” he added.

Thoresen said insurers knew the review was coming but they had been sworn to secrecy and had not been briefed on its nature.

The affair was described by Treasury committee chairman Andrew Tyrie at the hearing as “a blunder”.

The ABI wrote to Chancellor George Osborne to express its unhappiness and an FCA board-level review into the scandal has been set up with the help of a law firm.

The sector’s shares had already suffered a huge hit last month after Chancellor George Osborne shocked the industry by announcing plans to end the requirement on pensioners to use their savings to take out an annuity.

Thoresen described the decision as “a shock”.

Tyrie said the market had been in “a shocking mess” prior to the announcement with pensioners facing pitifully low rates.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Loan Underwriter

£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935
The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory