FSA chairman Callum McCarthy has spoken out against the EU gender directive, saying it is likely to hinder the development of an efficient insurance market.
McCarthy has lined up with the financial services industry which opposes the equal treatment directive. He says the directive “runs counter to good sense” and is likely to increase the overall cost for women buying insurance cover.
The directive will prohibit the use of gender as a factor in the calculation of premiums and benefits for insurance. McCarthy questions whether the directive has been “thought through”.
The directive has been led by EU social affairs commissioner Anna Diamantopoulou who pushed ahead with it against advice from the financial services industry.
Diamantopoulou recently returned to domestic Greek politics and has been replaced by Stavros Dimas.
Speaking at a global financial leadership forum in London this week, McCarthy said FSA research shows that if the directive is implemented, a woman aged 40 wanting life cover would be likely to see her premiums increase by 16 per cent while the premiums for a man would fall by 8 per cent. He says young women drivers would face increases in premiums of 10-30 per cent for motor insurance.
ABI director general Mary Francis believes it is time that the FSA spoke out to defend consumer interest and the “good order of financial markets”. She says that, as it stands, the draft directive fails consumers and the industry.
Francis says: “The FSA's intervention in this debate is highly significant. The regulator is joining a growing consensus in the industry and outside which can see that these proposals would hurt many millions of customers.”
McCarthy says: “Any regulatory intervention which runs counter to an underlying reality imposes costs. The FSA would expect, as well as rather arbitrary effects on both men and women, that the proposed directive would increase the overall cost for consumers of buying insurance cover.”
Bankhall has continued its aggressive expansion in the mortgage market by snapping up Norwich Union's mortgage club, adding another 7,000 brokers to its fold.
The NU mortgage club will operate under the umbrella of Premier Mortgage Services, alongside Prudential's mortgage club which Bankhall bought in January and its original mortgage network Point One until all three are integrated. Between them, they have a combined membership of 43,000 members although numbers may overlap.
NU's mortgage club is the fourth-biggest in the market with 35 member lenders, many of them small societies which Bankhall will have access to.
Neither party would discuss the terms of the deal.
Bankhall chief executive Paul Hogarth says as the mortgage market looks to regulation at the end of October, distributors are setting out their stalls out for the big numbers of intermediaries still undecided whether they want to go opt for direct authorisation or take the appointed representative path.
He says scale has been reached with the NU acquisition and the Pru mortgage club deal in January and says he does not foresee any further acquisitions in the near future.
Hogarth says: “This deal is about consolidating our position. We wanted to shore up our strength in the mortgage market and we have done so. It is basically a scale game and we have reached sufficient scale.”
NU sales & marketing dir-ector Peter Hales says: “With the onset of regulatory change in the mortgage market, intermediaries who have supported NUMC will require additional services such as authorisation and compliance. The sale of NUMC to Bankhall will give intermediaries access to these services.”