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FCA chair says closed book review is a ‘blot on the landscape’

The inquiry into the FCA’s bungled announcement of its review of closed book legacy business is a “blot on the landscape”, says FCA chairman John Griffith-Jones.

The regulator has appointed Clifford Chance senior commercial litigation partner Simon Davis to carry out an independent inquiry after insurers’ share prices plummeted following an FCA media briefing on the review in March.

Speaking at the FCA’s annual public meeting in London yesterday, Griffith-Jones said: “It is not pleasant to be subject to an inquiry – that is human nature.

“But we promised to be an open and transparent organisation and act to the same standards we expect of the firms we regulate. And the consequence of that is that if we make a mistake – and I am not saying we did – you are prepared to have someone look at it, and that is what we are doing.

“How are we feeling internally? Obviously it affects some people directly and they have been absolutely masterful in carrying on with their jobs as though this has not happened. The organisation is of very good heart and this is only a blot on the landscape, and one we are very anxious to get past.”

FCA chief executive Martin Wheatley added: “We have got a massive regulatory agenda and the one thing we cannot do at all is go into some sort of purdah while we wait for the outcome of this review.

“So for me it is absolutely business as usual.”

In March, the Daily Telegraph reported the FCA was set to force insurers to review exit charges on all their legacy policies as part of a closed book investigation. Insurers’ share prices plummeted in the six hours it took the FCA to release a clarification statement on the scope of the review.

The FCA issued a further statement later the same day to say it would carry out an investigation into its handling of the matter.

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There are 3 comments at the moment, we would love to hear your opinion too.

  1. Whitewash. And what action will be taken against Adamson for this second cock up? “an open and transparent organisation [that proposes to] act to the same standards we expect of the firms we regulate”. Pull the other one, mate, it’s got bells on.

  2. “…… Obviously it affects some people directly and they have been absolutely masterful in carrying on with their jobs as though this has not happened”. Why should these people care? The worst that will happen when the review is published is that the FCA will make a statement along the lines of “It was not the best thing we have ever done. Important lessons have now been learned from this review to ensure this type of thing can’t happen again, so we can now move on, put these processes in place and get on with doing our job”.
    “Oh and by the way X, Y or Z provider here is a £50 million fine for not playing by the rules………..”
    Those responsible should resign and if the don’t then they should be sacked. Problem is that no body can sack anyone at the top of the FCA because it is independent of Government and has no shareholders to be accountable to, so the gravy train will simply go on and on.

  3. It’s not a blot on the landscape, it’s yet another blot on the FCA’s already extremely blotted copybook (this being a continuation of the FSA’s extremely blotted copybook).

    Still, spending £1.7m on the investigation to be undertaken by a law firm of the FCA’s own choosing (so how’s that supposed to be independent?) should yield a suitably rose-tinted report that will play down as much as is credibly possibly (and probably more) the stupidity of Adamson’s actions and the damage caused. We can be pretty certain that it will steer very clear of recommending any action be taken againt Adamson, even though in any private company he’d be out on his ear without a severance package before you could say Jack Spratt.

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