FCA chief executive Martin Wheatley has admitted the regulator’s handling of media reports surrounding its review into closed book policies was “not the FCA’s finest hour”.
The Daily Telegraph first reported on 28 March that the regulator is concerned legacy customers are locked into poor investments by steep exit fees, and insurers may be “exploiting” them by levying large fees to subsidise other parts of the business.
The report prompted several insurers’ share price to plummet, including Resolution, Legal & General, Aviva and Phoenix.
The regulator was forced to issue a clarification statement at 2.30pm explaining the scope of the review in more detail. At 6.30pm, the FCA issued a further statement that it would carry out an investigation into its handling of the issue.
Over the weekend, it was reported that insurers had called for Wheatley to resign over the issue and The Sunday Times suggests the FCA only put out its first statement of clarification after a phone call between Wheatley and Association of British Insurers chief executive Otto Thoresen. The newspaper said the ABI will write to Chancellor George Osborne to complain about the FCA.
Speaking at City Week 2014 in London yesterday, Wheatley said the FCA had quite rightly come under scrutiny for the way it handled the media reports surrounding the review, adding that he supported an internal investigation into the matter.
He said: “If firms were involved in events like those we saw before the weekend, then we would ask serious questions. It is now incumbent on us to answer the same. That is why I fully support the investigation into Friday’s events announced by our board. We will share the findings publicly in due course.
“This was clearly not the FCA’s finest hour – but it does serve as a timely reminder of the importance to all parties involved in markets of the care and thought that is needed when handling the significant amounts of information we hold as a part of going about our day-to-day business.”