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ABI says there’s ‘no agenda’ to weaken FCA over closed book blunder

Association of British Insurers director general Otto Thoresen says there is “no agenda” to weaken the FCA after the regulator’s blunder in announcing its closed book review.

Last month the Daily Telegraph reported the FCA was set to examine exit charges as part of a review into closed book policies. Insurers’ share prices plummeted in the six hours it took the FCA to release a clarification statement on the scope of the review.

In the wake of the report, the ABI wrote to Chancellor George Osborne over its concerns about the way the regulator handled the announcement.

But speaking at a Treasury select committee hearing on the Budget today, Thoresen said the industry is not trying to undermine the FCA as a result.

He admitted the announcement was “clumsy”, caused “confusion” and was “not helpful” to industry relations with the FCA.

MPs questioned whether there was a strategy to put political pressure on the regulator more widely. 

Thoreson said: “There is no other agenda. The letters sent to the Chancellor and the FCA chair talked about learning lessons.

“The biggest challenge on the Friday morning was that, unlike any other announcement, we did not have a press release or report to which we could compare what was being said. It was very difficult to give people confidence.”

The FCA is now carrying out a review over its handling of the incident. FCA chief executive Martin Wheatley has admitted the episode not the regulator’s “finest hour”.

Thoresen said the thematic review into closed book pensions should be treated separately to the announcement, and called on regulator to be “fair, balanced and objective”.

He said: “The environment has to be based on trusted relationships between regulators, the industry and Government and the strong reputation of that system. The kind of experience we had at this particular period has not been helpful. We need to learn from certain aspects of it.”

Newspaper reports have quoted insurance chiefs calling for FCA chief executive Martin Wheatley to step down following the debacle and the regulator has be publicly rebuked by the Chancellor.

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  1. Julian Stevens 8th April 2014 at 8:07 pm

    The only thing that’s likely ever to force the FSA to be “fair, balanced and objective” is the creation of a Statutory Independent Regulatory Oversight Committee. Why isn’t the ABI (not to mention APFA) doing everything in its/their powers to bring about the creation of such a body? Oh, I forgot, APFA HAS no powers. All APFA does is hold meetings and write the odd letter or article for the trade press.

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