UK lawmaker calls insurance review leak an "extraordinary blunder"

LONDON, March 29 Sat Mar 29, 2014 10:51am EDT

Related Topics

LONDON, March 29 (Reuters) - The head of the UK parliament's Treasury Committee on Saturday described as an "extraordinary blunder" the leak of a planned review by the financial services watchdog into the life insurance industry, which sent shares in insurers tumbling.

The Financial Conduct Authority (FCA) was due to announce the investigation in its annual business plan on Monday. But a senior FCA supervisor outlined the review in a press interview on Friday.

"On the face of it, this is an extraordinary blunder," Andrew Tyrie, the Treasury Committee head, said in a statement.

"It is crucial that we have a full and transparent explanation about how such an apparently serious mistake came to be made by our financial services watchdog - the body appointed by parliament to enforce high standards of conduct."

Insurance stocks fell sharply on speculation the review could lead to changes that affect the profitability of their proucts.

The FCA later issued a statement saying its board acknowledged market concerns regarding press coverage of the planned investigation.

"The board will conduct an investigation into the FCA's handling of the issue involving an external law firm and will share the outcome of this work in due course," it said.

Tyrie said his committee would want to be satisfied the external oversight of that investigation would be independent of the FCA. He said one external person should be in overall charge of the inquiry into the leak.

"The Treasury Committee will probably want to see the independent reviewer before he or she commences work," he added.

The FCA industry review will look at whether people locked into some 30 million pension and other savings plans sold by insurance firms in the 30 years after 1970 are treated fairly compared with new clients. (Reporting by Stephen Addison; Editing by Sophie Hares)

FILED UNDER: