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ABI calls for Wheatley’s head after FCA zombie fund fiasco
by Dylan Lobo on Mar 31, 2014 at 07:55
The Association of British Insurers (ABI) is calling for Financial Conduct Authority head Martin Wheatley (pictured) to resign, according to the Sunday Times.
The trade body for insurers is understood to be furious by the muddled way the financial watchdog revealed it would launch an investigation into life policies sold between 1970 and 2000.
According to the paper, the ABI is planning to write a letter to chancellor George Osborne outlining its issues and demanding Wheatley’s resignation.
Reports on the morning of 28 March claimed the FCA would probe 30 million of these so called zombie funds based on comments made by FCA official Clive Adamson.
Investors dumped insurance shares on the reports and an increasingly anxious L&G - which was among the heaviest hit - issued a stock exchange statement demanding clarification on the plans as the market became increasingly 'disorderley'
The regulator eventually issued a statement in the afternoon stressing the investigation would not be as wide-ranging as feared and that modern rules would not be imposed retrospectively.
The statement helped pare back losses for insurers but did not prevent the sector nursing a £2.4 billion loss.
In its clarification the FCA said the investigation would be conducted by external lawyers. 'This is not a review of the sales practices for these legacy customers and we are not looking at applying current standards retrospectively – for example on exit charges,’ the FCA said.
Over the weekend Andrew Tyrie, chairman of the Commons Treasury Select Committee, said the FCA seemed to have made an ‘extraordinary blunder’.
‘It is crucial that we have a full and transparent explanation about how such an apparently serious mistake came to be made by our financial services watchdog - the body appointed by parliament to enforce high standards of conduct’, Tyrie said.
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