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Govt told it will hamper market with Catmarks

The FSA has sent a shot across the Government&#39s bows by stating that it risks hampering innovation and reducing competition if it introduces Cat standards for decumulation products such as annuities.

In its report published this week, the regulator says there is no case for Catmarks to be introduced for decumulation products, including annuities, income drawdown and equity release.

But it warns that the Government needs to keep an eye on the market as it develops.

The report says: “In a relatively new market, standards can help to signal to consumers basic and/or reasonable value products but setting standards can risk hampering innovation and reducing competition.”

FSA spokeswoman Jackie Blyth confirmed that the report was referring to Cat standards for decumulation products.

A Treasury spokesman says: “I do not think Cat standards have hampered innovation in any way. There is no evidence to suggest that.”

Clerical Medical pensions strategy manager Nigel Stammers says: “It sounds like the FSA answering the Treasury&#39s question that it does not want any more product standards. Cat standards are already a much maligned concept, meaning different things to different people under different circumstances.”

Wentworth Rose managing director Philip Rose says: “It is so dangerous if you start limiting the direction in which the market can develop.

“It is far too crude a method to simply slap a Cat standard on products and then expect people to buy them.”

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