Insurance Issues That Need Exposing
The FCA (Financial Conduct Authority) reported that they planned to carry out a report last March that would review the current insurance and pension markets. Millions of savers across the country finally felt like the FCA was making the necessary steps to deal with the ridiculous miss-selling of insurance products over the past 30 years. Customers have been treated poorly and given the short end of the stick for far too long.
However, everything went a little pear-shaped when the share prices of the companies that were likely to be affected by the report started to fall rapidly the day after the announcement. The FCA had to release a clarification of the review’s scope shortly after in order to re-stabilise the market. The FCA was hit with accusations of breaking their own rules by releasing certain market-sensitive information. Law firm Clifford Chance has called the handling of the matter “clumsy and naive”.
Apparently the FCA didn’t realise that this information was price sensitive before releasing it. The thing is, insurers had already been affected by the budget a few weeks earlier, making changes to pensions and annuities. The FCA’s chief executive (Martin Wheatley) and a number of his senior executives have to forfeit their bonuses this year. After all, it is their job to regulate the market and make sure everything is running with stability and these criteria have not been met.
The FCA’s report is supposed to be for the benefit of the consumers and not the insurance industry. Millions of insurance policy holders are justifiably angry with the performance of their annuities and endowments. It is important that a flawed process and a dodgy media approach do not divert any attention from the real issue.
James Savery, 11 December 2014