Then shadow pensions spokesman John Denham said: ‘The warning signs are clear: many people on low incomes, who already have low pensions, appear to be vulnerable to reduced pensions because they have shifted from Serps.”
In February, MM featured a story heralding a false dawn, reporting PIA draft guidance on fact find rules which were “the first step towards lighter regulation”. National brokers came together to pursue a legal battle to ward off potentially huge pensions misselling fines, even for those advisers who had undertaken their reviews in a prompt fashion.
Sun Alliance accused its rivals of over-inflating endowment bonuses. Valuation manager Mike Kipling said: “The difference between us and others is they have been using surpluses withheld from other years. This approach is potentially misleading to incoming policyholders who see these ridiculous rates of return.”
Later Kipling, in his capacity of Institute of Actuaries regulation committee chairman, would ask the PIA to re-write the rules on with-profit guides. The NAPF backed compulsion and a PIA report showed how direct-sales companies deducted most charges on products.
By March MM reported “the rationalisation of the life insurance industry began in earnest with Halifax’s surprise £800m takeover of Clerical Medical”.
In April, Woolwich chief executive Peter Robinson was ousted over allegations of misuse of company funds following an external audit by KPMG which revealed discrepancies in expenses claims.
May saw the £6.3bn merger of Royal Insurance and Sun Alliance. And in June, PIA running costs soared by a whopping 166 per cent over the previous 12 months to £48.2m from £18.1m. The increase included a £15.9m levy to the ICS, and a 7 per cent pay rise for PIA chief executive Collette Bowe.
In the summer, IFAs’ tempers were hotting-up as they complained to the Advertising Standards Authority over a Virgin Direct advert which said: “We refuse to have anything to do with salesmen and their outrageous commission”. And an Abbey salesman was intent on producing a hilarious TV sit com about insurance salespeople called “Life!”.
October brought an ill wind that would blow for years, as the IFA Association prepared to launch a major campaign against the PIA in the belief that it was planning to scrap polarisation, while Labour promised it would end self regulation.
By September, disenfranchised Equitable Life managed annuitants were setting up their own action group. While IFA Ivan Massow launched a poster campaign aimed at gay men who had seen their insurance premium soar in the wake of the Aids crisis.
The year ended with Money Marketing running a bizarre story about the whereabouts of Bob Monkhouse’s stolen joke book. The man responsible turned out to be London-based IFA Stanley Swaine.