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FSA to visit insurance offices as it admits to concerns

The FSA says it does not know enough about how insurance companies

operate and plans to visit offices to carry out risk assessments by

the end of March.

It is aiming to complete a risk assessment of all sectors of the

market by the end of the year under its new risk-based approach to

regulation but is speeding up the assessment of insurers because of

worries about the sector.

Insiders say that the regulator&#39s worry about life companies is an open secret.

FSA managing director John Tiner recently gave a speech detailing his

concerns about risk management in life companies. He also relaxed

some of the solvency criteria for life offices.

The FSA is concerned that previous monitoring of insurance companies

depended simply on analysis of regulatory returns. But it now intends

to increase the level of scrutiny by visiting the firms to carry out

its own inspections on site.

The FSA note says: “Insurance firms are on a different timetable: we

do not know so much about the firms in this sector and they are under

particular stress caused by current market conditions. So we are

planning to complete their reviews by the end of March 2003.”

Annuity Bureau director Ronnie Lymburn says: “This is closing the

stable door after the horse has bolted. The markets are not going to

bounce back and the ability of some companies to write new business

must be marginal. The FSA should have seen this coming. What they

find out will be interesting.”



“Yes, I would agree with that because of the care and attention youget from a personal adviser instead of the bulk service in a bank.”Brian Donn, North East Independent Financial Advice “Yes, I think so, because we will maintain our independence and buildup personal relationships with our clients.” Christopher Knox, BeaconHouse Investments “I would say […]

Pru predicts difficult mortgage market

Prudential Mortgage Services recorded applications worth £24.5bn in 2002, up from £14.9bn in the previous year and made £18.3bn completions, up from £10.9bn. It says this performance makes it the UK&#39s biggest mortgage club, facilitating 204,000 new mortgages last year, accounting for 8.5 per cent of all mortgages arranged. But it warns the next 12 […]

Life offices don&#39t want Revenue&#39s drawdown cash

Income-drawdown providers are objecting to Inland Revenue proposalsthat will give them cash windfalls if clients die before 75.The Revenue&#39s pension simplification proposals, published inDecember, limit death benefits on drawdown to the value of theretirement savings paid in, less income taken out. Funds over thisthrough investment growth, would be paid to the drawdown provider.Providers and advisers […]

Selestia – Self Invested Personal Pension

Thursday, 20 February 2003 Type: Full Sipp Minimum investment: Lump sum £2,500 Investment choice: All Inland Revenue permitted investments Administrator: Hornbuckle Mitchell Charges: Initial £210, annual £390 Commission: Initial 3%, renewal 0.5% Tel: 08456 410410


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