This may mean companies such as Norwich Union, Standard Life and Friends Provident could release some of the capital to fund growth in other areas of their businesses.
If this goes ahead under the EU regulations of Solvency II then certain life offices with be breathing a heavier sigh of relief than others – namely those that are under pressure to improve their profitability in the UK.
The Italian insurance giant Generali is thought to be seriously stalking Aviva with suggestions that HSBC has been called in to advise on mergers and acquisitions.
This has temporarily quashed the relentless rumours of Aviva’s potential approach to buy Prudential. Especially as Swiss Re are understood to have made an offer for the life fund business of the Pru.
There are still no concrete sales figures available for the Pru’s flexible protection plan but head of protection Paul Cowman says they are pleased with the way sales are going. One cheeky commentator wonders how many policies they have sold to providers who have bought them purely to look under the bonnet and check out the mechanisms.
Norwich Union has launched what it calls Simplified Life Cover which will initially be available through the website and call centre. It is to be rolled out to the intermediary market in the autumn.
The process appears to be very quick with filling in the application and a decision only taking around seven minutes to come back to the consumer. The disclosure needed is minimal with few medical questions and only two questions relating to occupation.
But it does appear to be aimed at healthy clients because those who answer yes to any of the serious health problems cannot get cover. Premiums are slightly higher on this than the standard NU contract but the difference is negligable.
Lifesearch warned protection providers to monitor the information they send out to IFAs after finding inaccuracies in promotional material from three life offices.
The errors are pretty appalling because they relate to competitor products being unfairly represented by the guilty life offices which claimed they did not contain certain product features that they did.
Any provider that is doing this is sailing very close to the wind and whether it is intentional or not, this is an issue that must be taken seriously because advisers could be misled by the inaccurate information.
Although Lifesearch will not name the culprits, Kevin Carr warns that if it happens again he may be forced to take further action.
The Carphone Warehouse and Regency Mortgage Corporation have both been fined by the FSA for breaches relating to insurance.
The Carphone Warehouse was found to have not treated customers fairly in its sale of general insurance products and was fined £245,000 as a result. Regency was the first payment protection insurance firm to be fined since GI regulation was introduced and was fined £56,000.
Who said the FSA had no teeth? It’s certainly biting now.