View more on these topics

Tiner says life offices have overpaid bonuses

FSA director John Tiner has criticised life insurance companies for overpaying bonuses on with-profits policies, claiming this raises consumer expectations and could be unsustainable.

Speaking at a CII Breakthrough lecture last week, Tiner said he is “worried about the expectations of policyholders”.

Tiner has been given the job of implementing the recommendations of the Baird report into the FSA&#39s handling of Equitable Life.

He has dubbed this the Tiner Project.

He questioned whether current levels of asset shares being paid on with-profits policy bonuses were sustainable. Tiner said: “Distribution to with-profits policyholders has been well above their asset shares.

“Providers have distributed about 110 per cent of asset shares through the 1990s. The question for life offices is, is that sustainable, and if not how does it affect their marketing of products.”

He said life companies will have to improve the transparency of with-profits funds and after N2 will be required to publish more detailed free-asset ratio returns and performance data, disclose internal records of asset allocations within funds and make returns for 2001 available online by the end of April 2002.

Tiner said terminology in the insurance industry is a minefield and he wants to make it clearer.

He said the approach to regulating the insurance ind-ustry has been relatively distant but N2 will make it more “productive and challenging” with management becoming more accountable.

Scottish Mutual pensions development director Leslie Gray says: “We need to be clear that publishing details of asset shares will not put information into the hands of analysts who will make buy, sell or hold recommendations on those funds.”

Recommended

UCB Home Loans – Buy2Let Tracker

Friday, November 23, 2001.Type: Discounted tracker rate buy to let self-certificationmortgage.Discounted term: Three years.Discount: 1 per cent from Bank of England base rate plus 1.99 percent.Payable rate: 5.49 per cent.Minimum loan: £25,000.Maximum loan: Loans of up to 50 per cent of valuation subject to amaximum of £750,000, 51-70 per cent subject to a maximum of£500,000, […]

Zurich chief warns against providers investing in IFAs

Zurich IFA is warning rival providers against investing directly into IFA businesses, saying that giving IFAs more support services will be more productive. The company wants to see more gap-filling opportunities arise from the polarisation review. It says allowing a pro-vider to white-label gap-filled products under its own-name products would solve customer confusion. Zifa, which […]

F&C Management – With-Prospects Fund

Thursday, November 22, 2001.Type: Oeic.Aim: Growth and income by investing in UK and overseas equitiesand fixed interest investments.Minimum investment: Lump sum £2,500.Investment split: International equities 60 per cent, investment gradebonds 40 per cent.Isa link: Yes.Pep transfers: Yes.Charges: Initial 5 per cent, annual 1 per cent.Commission: Initial 4 per cent, renewal 0.25 per cent.Tel: 0845 6001868.

Jupiter acquires Lazard portfolio service

Jupiter is to acquire the independent managed funds business from Lazard Asset Management for an undisclosed sum.The acquisition will reunite Jupiter’s multi-manager team, led by John Chatfeild Roberts, with more than £250m of assets which it ran while it was at Lazard. The team moved to Jupiter in the first quarter of 2001.The deal will […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com