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Tiner sees future for &#39new WP&#39 but wants to see management improve

Strong investment performance in the with-profits industry has camouflaged poor management by product providers in recent years and this issue must be addressed, says FSA managing director John Tiner.

Speaking at City law firm Norton Rose sponsored conference The Changing Face of Life Assurance in London last week, Tiner challenged the industry to address the great imbalance of power between insurers and consumers over understanding of financial products.

The aim of the meeting was to update the industry on the progress of the FSA&#39s review of life office regulation but Tiner also used it to endorse with-profits despite his concerns, saying there is a future for the business but perhaps under another guise.

Tiner said there is a risk that regulation could impose costs which will suffocate innovation in the industry, something he says his review will try to avoid.

Pointing to the work that the FSA has coming up this summer, he referred to a number of regulatory papers, including a consultation paper in July looking at the use of reinsurance by life offices, a discussion paper on regulatory reporting in late spring and a disclosure consultation paper in the summer.

He said: “There is a great imbalance between the power in the hands of the seller and the power in the hands of the buyer.

“There is a need to rebalance this relationship. We want to see a UK retail financial services market that is much more accessible. It is not understood by huge proportions of the public.”

“In the past, strong investment performance has shiel-ded poor management. Insurance regulation needs modernisation. Individuals need to be able to trust the system.”

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