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Strachan says caveat emptor alive and well

The FSA has moved to reassure firms about caveat emptor, saying reports of its demise have been exaggerated.

Speaking at the International Insurance Society conference in London this week, FSA sector leader for insurance David Strachan said treating customers fairly does not equate to the end of caveat emptor. Neither does it mean that policyholder returns have to outstrip market performance or that all firms have to offer the same level of service.

Strachan also highlighted Myners&#39 review of mutual life insurance firms, underlining its importance and recommending it to delegates.

He said one key issue of the review is how to get people to engage in businesses they co-own, which he said is no easy task.

Strachan went on to say that ratings agencies, which have previously been considered more influential than regulators, are starting to lose some of their influence as the industry moves towards a more risk-sensitive capital regime He pointed to a future with less regulatory presence, saying that once FSA reforms have been accepted, its presence will start to recede.

He said: “Admittedly, to date, our presence has been an obvious one in the insurance industry and this is largely because, since its inception, the FSA has been foc-used on addressing the imperfections of the regime that we inherited and delivering a regime that meets the realities of today&#39s market.

“Once the reforms have bedded in and a steady state emerges, our presence will recede to some degree.”


Abraham to decide on Equitable inquiry

Parliamentary Ombudsman Ann Abraham will announce on July 19 whether she will conduct a second investigation into whether the collapse of Equitable Life was caused by regulatory failure.

Sprinkling of gold to make returns shine

A small amount of gold in a diversified portfolio can give investors a more efficient return without increasing their risk, claims research from Scottish Life International. SLI says because gold acts as a hedge against poor equity performance, a small gold holding can reduce overall risk without a serious adverse effect on returns when it […]

Compensation scheme defaults 16 IFA firms

The Financial Services Compensation Scheme has declared 16 IFA firms in default. The firms are: ATA Financial Services of North Shields, Tyneside; Bowland Financial Management (in liquidation) in Nelson, Lancashire; Donne Insurance & Financial Services, Leeds; Richard Matkin, formerly trading as Albion Investment Management, Sunderland; Tony O&#39Neill Insurance Brokers, Macclesfield, Cheshire; Breckland Insurance Brokers, Brandon, […]

Positive Solutions chief blasts multi-tie &#39donkeys&#39

Positive Solutions has made a scathing attack on multi-ties, saying they are being used to rescue failing business models and will line the pockets of companies&#39 directors, not their advisers. Chief executive David Harrison has warned advisers that they will rue moving to multi-tied status because they will not be able to offer clients the […]

Lifetime ISAs – International Evidence

By Fiona Tait, Pensions Specialist Since the announcement in March, the Lifetime ISA (LISA) has attracted controversy. Heralded as a saviour for the self-employed and the young wanting to get on the housing ladder, the new LISA risks adding confusion for savers trying to fully understand the benefits of new workplace pension savings through auto-enrolment. To […]


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