LONDON, April 8 Britain's insurance industry has
called for a fully independent inquiry into last month's
pre-release by the financial watchdog of plans for a review of
aspects of the way the sector handles some of its pensions and
The premature disclosure to a newspaper sparked a sharp fall
in shares in insurers including Aviva, Prudential
and Legal & General and has already been described by
Martin Wheatley, head of the Financial Conduct Authority (FCA),
as "not our finest hour".
The FCA had told a newspaper of its plans, which involve an
investigation into 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
The watchdog did not itself clarify the nature of its review
until more than six hours after the start of trading on the
London Stock Exchange.
The Association of British Insurers (ABI) said in a letter
to the FCA, released to the media on Tuesday by parliament's
Treasury Committee, that it has serious concerns about what
appeared to have been premature and selective disclosure.
The watchdog had said an investigation into its handling of
the news would be carried out by its board with an external law
firm. But the ABI said it wanted 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," ABI Director General Otto Thoresen said
in the letter.
Thoresen was quizzed about the incident by the Treasury
Committee on Tuesday. Britain's finance minister George Osborne
and Committee members have already called for an independent
The FCA said it will announce the terms of reference for the
investigation as soon as possible. Its Chairman John
Griffith-Jones wrote to Osborne on April 1, saying the
investigation will be "done by an external legal firm and will
be independent of the executive".
The ABI said the best way to make changes in the market was
through collaboration with the industry, which he said was not
trying to shy away from reviews into its activities.
"In that context, it is important that the FCA's media
strategy is, and is seen as being, consistent with its stated
intent of working collaboratively with the industry," the ABI
(Editing by Clare Hutchison and David Holmes)