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ABI defends with-profits at calls to control market

The ABI and major life off ices are hitting back at calls to curb the multi-billion-pound with-profits market following the Equi table Life debacle.

The move follows nat-ional press criticism and comments by FSA chairman Howard Davies on the dec reasing appropriateness of the products for many consumers.

With-profits have taken a drubbing since Equitable was forced to close its books to new business this month which brought into question the viability of the policies.

Davies told a national newspaper that, given people have more dynamic family circumstances than when with-profits were des igned in the 19th Century, 25-year-plus policies may not always the best fit for consumers.

Davies&#39 comments follow the revelation that the regulator is closely analy sing with-profits&#39 marketing literature, as reported in Money Mark eting on Nov ember 2.

ABI media manager Vic Rance says: “We are emph asising that Equitable is a specific case with no obvious and direct implications for the rest of the industry. Also, there are more flexible policies available to suit changing circumstances.”

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