Insurers push back with clamour for resignation of FCA chief

Wheatley under fire after plan to probe the insurance industry leaked to media

The head of Britain’s financial regulator admitted that leaking market-sensitive information to a national newspaper was not its “finest hour” as calls for his resignation grew yesterday.

Martin Wheatley has been under pressure since since the Financial Conduct Authority’s (FCA) plan to investigate the insurance industry were handed to The Daily Telegraph, hitting shares in most of the sector’s largest companies on Friday.

A total £2.4bn was wiped off the value of insurers such as Aviva, Legal & General, Resolution and Prudential after the FCA’s director of supervision was quoted as saying that the regulator planned to examine 30 million old policies.

The FCA was later forced to clarify its position and announce a far less wide-ranging and potentially costly review of closed life policies.

“Whenever markets move like they did on Friday there is always scrutiny,” Mr Wheatley told a conference yesterday.

“This was clearly not the FCA’s finest hour but it does serve as a timely reminder to all parties involved of the care and thought that is needed when handling significant amounts of information we hold as part of going about our business.”

The Association of British Insurers is now understood to be planning to write to the Chancellor, George Osborne, outlining its issues and demanding Mr Wheatley’s resignation.

One insurer told The Independent: “If any of us had briefed market-sensitive information to a single media outlet we would have been in big trouble ... ironically with the FCA.” 

Mr Wheatley’s comments came after the FCA revealed that it will need an extra £14.3m this year.

The FCA said in its business plan published yesterday that its annual funding requirement would rise from £432.1m to £446.4m – an inflation-busting increase of 3.3 per cent.

He said the bulk of the increase in fees charged would fall on larger firms and that 42 per cent of the firms regulated by the FCA would pay the minimum annual fee of £1,000 a year.

The regulator plans to look at conflicts of interest in investment banks and how they ensure confidential information received by one part of the business is not abused by other areas.

Fund managers will also come under close scrutiny in the coming year with the focus landing on their trading activities and their dealings with clients.

Also at the top of the regulator’s list will be working  on how banks can reduce  the risk of traders manipulating key benchmarks in  the wake of the Libor scandal and the ongoing reviews of alleged currency and gold rigging.