UK insurers want independent probe into news of sector review

LONDON, April 8 Tue Apr 8, 2014 5:25am EDT

LONDON, April 8 (Reuters) - Britain's insurance industry has urged its regulator to hold a fully independent inquiry into how news of a review into the sector was released.

Shares in the sector tumbled on March 28 after the Financial Conduct Authority told a newspaper it was reviewing part of the insurance industry, raising fears that profitability would be hit.

The watchdog did not clarify its review until more than six hours after trading had opened.

The Association of British Insurers (ABI) said in a letter to the FCA, released to the media on Tuesday, that it has serious concerns about what appears to have been premature and selective disclosure.

The watchdog has said the investigation into its handling of the news would be carried out by its board with an external law firm, but the ABI wants an independent probe, saying the watchdog "cannot be permitted to investigate itself".

"This is very much a situation in which even the perception of a lack of objectivity or thoroughness could be damaging to the FCA and its aims," the ABI said.

(Reporting by Huw Jones, editing by Clare Hutchison)

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