The FCA has set aside £1.7m to carry out an inquiry into how it announced an investigation into closed book policies which sent insurers’ share prices tumbling back in March.
The Daily Telegraph reported in March that 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.
Clifford Chance senior commercial litigation partner Simon Davis has since been appointed to carry out the inquiry.
A freedom of information request, submitted by the BBC, has now revealed the FCA has been invoiced £116,845 so far by Clifford Chance, excluding VAT.
Based on a preliminary estimate, the regulator has set aside £1.7m from its 2013/14 annual accounts to cover the costs of the inquiry.
The annual accounts will be published next month. The FCA will publish a final figure on total costs of the inquiry once it has been completed.
The FCA declined to comment further.