The large Scottish life insurance sector tends to stick together, often following the lead taken by Standard Life, the UK's largest mutual insurance office, based in Edinburgh.
But with the exception of Scottish Amicable, the other Scottish offices are not yet ready to abandon the attempt to establish the PIA, the body supposed to take on responsibility for the scandal- wracked personal savings sector.
Jim Stretton, Standard Life's deputy managing director, resigned from the PIA board on Monday because of plans to limit financial services executives to only nine of its 19 seats, with the rest filled by public interest representatives and the PIA's chief executive.
Standard Life argues that the PIA created will not be self-regulating, as intended by the 1986 Financial Services Act, and will be 'an unnecessary tier of regulation accountable directly neither to Parliament nor the industry'. With Prudential Corporation already opposed to continuing with self- regulation, Standard Life's move has weakened the PIA's prospects of success.
Mike Ross, managing director of Scottish Widows, said that although he believed the proposed board composition to be wrong, 'the point is too fine a one to withdraw our support from the PIA'.
Mr Ross added: 'If the views of nine practitioners are not sufficiently sound and meritorious to win over 10 non-practitioners, what hope will there be to win over the hearts and minds of the public, who are our consumers?'
Scottish Life and Scottish Provident took a similar view. David Woods, managing director of Scottish Provident, said: 'I understand the issue, I am not entirely happy about it, but I don't think it's worth sacrificing the PIA over it.'
Norwich Union, the large mutual office that has much in common with the Scottish insurers, was also not keen to join the call for statutory regulation. Philip Scott, general manager, finance, said Norwich had not taken a 'pre-determined stance' on board structure and would await the PIA's prospectus.
Alistair Darling, Labour's City spokesman, called on the Government to end self-regulation, which he blamed for the recent personal pension transfer fiasco.
Labour wants direct regulation by the Securities and Investments Board, the existing senior regulator, with responsibility to Parliament.Reuse content