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Kelly denies mutual prejudice as MP raises fears on reserves

Scottish National Party MP Alex Salmond has challenged the Treasury over its financial reserve requirements for mutual companies.

Salmond raised fears over the future of demutualised life companies in a debate at Westminster Hall in London last week.

He is concerned that Standard&#39s mutuality review could see the company taken over by a rival, similar to Scottish Amicable&#39s acquisition by Prudential and Scottish Mutual&#39s purchase by the Abbey group.

Salmond asked Treasury Financial Secretary Ruth Kelly to consider whether forcing a mutual to be fully reserved undermines its claim of mutuality and the advantages that go with it.

Kelly denied that there was any conspiracy against Standard Life, mutuals or Scottish financial services and that proposals to update regulation were not part of a demutualisation campaign by the FSA or the Government.

She said Standard is in not being singled out by the FSA in terms of realistic reporting, adding that the move is part of much needed regulation of capital requirements for life offices, whether mutual or quoted.

Salmond said: “Is the Financial Secretary concerned that some of the new ratios and applications of guarantees may create an inadvertent pre-judice against mutual ownership and will make it more difficult for big companies to remain in mutual ownership?” Kelly said: “The Government recognises the contribution of all forms of mutual financial services providers to offering choice and diversity in the sector. The recent prop-osals to update life insurance regulation are categorically not part of a demutualisation campaign by the FSA or the Government.”

•FSA letter, p20


Equitable faces claims from late contributors

The Equitable Life Late Contributors Action Group is claiming that thousands of late contributors could be in line for compensation. The group is calling for volunteers and new members to help organise a campaign to seek compensation through the courts or the Financial Ombudsman Service. Founder Paul Weir says hundreds of Equitable late joiners have […]

FSA urged to set the agenda for exams

The FSA has been urged to take more responsibility for the development of exams for mortgage brokers by the Association of Mortgage Intermediaries. The AMI is concerned over lack of progress on exams by the Financial Services Skills Council. Director Chris Cummings says the Skills Council will not be setting approved exams but just a […]

Skandia offers distribution choice

SKANDIA MultiBond &#45 Skandia Distribution Bond Type: Unit-linked bond Aim:Income and growth by investing in a range of distribution funds Minimum investment: Lump sum £5,000 Fund links: Skandia Axa distribution, Skandia DWS managed distribution, Skandia New Star managed distribution, Skandia Norwich distribution, Skandia Prudential distribution, Skandia distribution portfolio Allocation rate:100% Special offer: Allocation rate increased […]

Confidence high but only for mini Isas

Investor confidence is at its highest for 18 months but many potential buyers only intend to put their money into a mini cash Isa, according to Hargreaves Lansdown. The company&#39s investor confidence coefficient rose to 226 in January – its highest level since July 2002 aside from a brief blip in September but 41 per […]


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