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Standard seeking solvency waiver

Standard Life is to ask the FSA for a solvency waiver but says this

is in line with other companies and not because it is close to

breaching solvency margins.

The company has already been granted a waiver from the regulator to

use future profits in its accounts, due to be published in March.

Standard is still firefighting following widespread negative coverage

of its bonus cuts at the beginning of the month. This has been

compounded by the revelation that its directors were in line for big

bonus payments. But Standard says the bonuses are linked to

investment returns and they have not yet been fully decided.

The life office is believed to be concerned about a significant dip

in sales after what it feels has been inaccurate reports in the

national press.

It had previously denied that it was going to ask for a waiver but,

following comments made by chief executive Iain Lumsden, Standard had

to issue a statement to its debt investors in which it cites FSA

managing director John Tiner&#39s recent comments about relaxing the

regulatory minimum margin.

The company says to apply for a waiver now allows for prudent

planning in the event that the markets fall further although Lumsden

has said that it can withstand a further dive in the FTSE 100 to

2,100.

Standard Life group finance director John Hylands says: “On a

realistic basis, we are extremely strong and are able to withstand a

very considerable stockmarket fall even from current depressed

levels. Investors have unquestionable security. The application for a

waiver reflects that in the eyes of the regulator we have been more

prudent than we need to be. It is nonsense to say that we are running

out of options.”

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