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L&G warns over regulatory intervention


Legal & General is calling for the Prudential Regulation Authority’s remit to be scaled back as the insurer says the regulator has become too interventionist in its approach.

The Financial Times reports the comments have been made as part of a submission to a Treasury select committee inquiry into Solvency II rules post-Brexit.

L&G argues Solvency II rules mean the PRA is “effectively overruling the judgement of the board” when it comes to setting capital requirements, and is taking a more “directive” approach when approving transactions.

The insurer says: “Boards do not feel empowered to make commercial decisions without reference to the regulator.”

L&G wants to see audit firms take over work related to capital requirements, to allow the PRA to focus on “the more strategic issues which impact its statutory objectives.”

The PRA declined to comment.



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  1. This Government and its regulators are being ever more intrusive in commercial matters. It really is a bit thick when you have politicians telling a business how it ought to be run, when the only experience most MPs have is of running a bath or their nose.

    In addition to L&Gs complaints, which are mainly confined to the financial sector, we also have the intrusion into the pay of CEOs and other directors and the enrolment onto boards of worker representatives. That these particular suggestions are just flim-flam and really only apply to PLCs is something that has not been fully scrutinised.

    How can these be applicable to private companies? I can’t see how they can. If they do, what encouragement to entrepreneurship? If I’m right then (for example) they would whistle in the wind when it came to Arcadia – that isn’t a PLC. As far as Sports Direct is concerned if they brass off Mike Ashley he could well take the company private.

    In the case of one of the highest paid UK executives – Martin Sorrell of WPP – he could easily just up sticks and relocate to the USA where he has substantial interests.

    What of the CEO of Shell? This is Anglo Dutch – so our Government could be told just to take a hike. BP? Well if Bob Dudley is hog tied he could go and work for another oil major – after all it is a globally competitive industry.

    Then the ratio between CEOs and average workers will look pretty good if you are examining a hedge fund!

    Stupid, stupid, stupid. Populist, unworkable politics. What else would you expect from the numpties in Westminster? They really need to understand what Capitalism is.

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