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ABI does not expect FSA to force insurers to raise capital

The Association of British Insurers says it does not believe the insurance sector will be forced to raise capital by the FSA.

Responding to reports that life companies fear they may be forced to sell shares in a tumbling market in order to meet the regulator’s stress-testing requirements, a spokesman for the FSA asserted that the sector is in “robust financial health”.

There are concerns that if life offices are forced to sell equities in poor market conditions it could have a knock-on effect of damaging the value of pensioners and investors’ assets.

An ABI spokesman says: “We are certainly not complacent and individual companies may choose to take their own measures, but we do not expect there to be any need for enforced capital raising.

“It is right that the FSA is keeping a close eye on markets.”

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