FSA boss to face MPs over insurers' inherited estates

FSA head Hector Sants is facing yet another grilling from MPs, this time over insurance companies’ inherited estates.

Sants is among figures that have been called to attend the Treasury Committee’s hearings to scrutinise the inherited estates held by insurance companies’ with-profits funds, which start on 22 April.

He will be joined by Claire Spottiswoode, who is acting as policyholder advocate in Aviva’s increasingly controversial negotiations to distribute its inherited estate.

The chief executive of Which?, the consumer group that has campaigned for a long time against what it  calls the ‘with-profits’ rip-off, will also attend.

On later dates, Mark Hodges, the chief executive of Norwich Union Life will face the committee, alongside his counterpart at the Prudential, Nick Prettejohn.

The Treasury Committee is after written evidence about inherited estates, looking for a definition of the funds, and considering whether allowing life assurance companies to use inherited estate to subsidise corporate activity has any adverse effects on competition.

It will also consider the principles that should guide the division of inherited estates in 90:10 funds between policyholders and shareholders upon reattribution of the estate.

The committee, which is chaired by John McFall, will look at the role of the policyholder advocate in such negotiations. It will also delve into the FSA’s role in regulating these estates.

Consumer groups have welcomed the Treasury Committee’s plans to scrutinise the inherited estates, highlighting a need for changes to the FSA’s ‘inadequate’ regulation of inherited estates.