UK insurers demand watchdog's head after blunder - report

LONDON, March 30 Sun Mar 30, 2014 10:43am EDT

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LONDON, March 30 (Reuters) - Martin Wheatley, chief executive of regulator the Financial Conduct Authority (FCA), is facing calls for his resignation after a gaffe that wiped billions of pounds from the value of insurance companies, the Sunday Times newspaper said.

The newspaper said the Association of British Insurers (ABI) is expected to write to finance minister George Osborne to complain about the FCA, which has been accused of creating a false market in insurers' shares.

The FCA was due to announce a review into the life insurance industry in its annual business plan on Monday. But a senior FCA supervisor outlined plans for the review in a press interview on Friday, which resulted in sharp falls in share prices across the sector, including Resolution, Aviva, Legal & General, Standard Life and Prudential.

The FCA later in the day said the review wouldn't look at sales practices nor would it apply current standards to old policies, such as on the level of premature exit charges, after which the insurers' share prices recovered some of their losses.

The Sunday Times said senior sources at four of Britain's biggest insurers had told it that Wheatley's position was untenable following Friday's events.

Both the FCA and the ABI declined to comment.

On Saturday Andrew Tyrie, the head of the UK Parliament's Treasury Committee, described the issue as an "extraordinary blunder". (Reporting by James Davey; Editing by Greg Mahlich)

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