Mick Newmarch, chief executive of Prudential Corporation, Britain's largest life insurer, said the PIA was 'another attempt to cobble together an improvement in something that is ultimately flawed'.
He said its creation would be no more than a hiatus before another reform of the investor protection system became necessary.
Mr Newmarch was the first to give evidence to the Commons Treasury and Civil Service Committee, which was starting an inquiry into financial services regulation.
His familiar criticisms come only days before the PIA issues its prospectus to the financial services companies that will become its members.
Mr Newmarch attacked the overlapping bureaucracy of a three-tier system that includes the Government, the Securities and Investments Board and junior regulators such as Fimbra and Lautro.
He said Standard Life, Scottish Amicable and Friends Provident had reached similar conclusions.
More generally in the industry, he added, 'there is a feeling of unease about where we presently are, but there is a disinclination to rock the boat'.
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