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&#39FSA must limit pace of change&#39

ABI head of life insurance Francis McGee is calling on the FSA to limit the pace of regulatory change to ease the financial pressure on life companies.

The ABI says the stream of consultation papers changing the way that companies do their business is expensive and disruptive at a point when companies can ill-afford a dilution of their resources.

McGee says the menu option for IFA remuneration will cost £47m up front and then £41m a year and the single money-purchase illustration documentation will cost £22m, with another £4.5m a year thereafter.

He is concerned that regulatory change is being brought in without regard for the economic climate.

He points out the insurance industry as a whole is paying £33m in fees to the FSA for the current year, more than double the figure of two years ago.

McGee says: “We are ramming this message home. Times are hard. Someone should decide what level of regulatory change the industry can afford and then stick to it, otherwise it is bad news. We are having regulatory change at a time when the companies should be doing other things.”

The Abacus director Philip Martin says: “There is a wider world than just insurance companies, who are antiquated and overstaffed. This is likely to fall on deaf ears.”

FSA spokesman Robin Gordon Walker says: “If you did not change, you would be a dodo. These are necessary changes which will come at a cost.”

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