At the Medicals Direct Panorama conference in London last week, Pacific Life Re chief marketing officer David Heeney said: “The way that we classify products, the way they are treated from an accounting point of view, how they are taxed and what you are allowed to include and not include are major constraints that affect the shape of our industry. A lot of our products are forced into artificial and long-standing pigeonholes and it makes it difficult to break those boundaries and create distinctions around those. The regulatory constraints are significant and they do impede innovation.”
Heeney said: “The compliance burden on the industry is quite a severe one. It creates bureaucracy and costs.”
Pru Protect actuarial and product director Deepak Jobanputra believes that regulators are well-intentioned.
He said: “They are very much trying to do the right thing by society, which is consumer protection and bringing back confidence in the marketplace. But he added: “Regulation does have a very challenging impact on the market and can be seen as something that can stifle innovation. I wonder whether you can ever achieve 100 per cent success in the field of regulation?”
Heeney warned the financial crisis is likely to make the situation worse. He said: “You have Lord Turner standing up at every opportunity telling us that the regulatory net is going to get tightened. It is not going to get any better.”