Responding today to the FSA’s report on ‘The future regulation of insurance’, Stephen Sklaroff, Deputy Director General of the ABI (Association of British Insurers) said:

“Many of the ideas put forward today have been widely canvassed and reflect our own concerns. The insurance industry has been striving for a number of years to improve performance for savers. Today’s report is an important acknowledgement that better regulation can also play a positive role.

We welcome, for instance, the FSA’s commitment to ‘smarter’ regulation, to a risk-based approach and to a supervisory culture that is informed, perceptive and proactive. The FSA also says that it intends to draw more on insurance expertise. It will be important for the FSA’s growing number of staff to adopt this approach as soon as possible.

We welcome, too, the strong commitment from the FSA to consult with the industry, and its support for a competitive market which rewards innovation. The ability of the UK industry to compete internationally must not be inhibited.

The insurance industry is currently the subject of a large number of reviews, all examining part of the picture. The reviews need to be looked at together; if consumers are to benefit, their conclusions must be consistent with each other, and with the many initiatives from within the industry such as the Raising Standards Quality Mark.

Equally, each review should now address the largest problem – that too many customers are not saving enough for their retirement. The UK currently suffers from an annual savings gap of around £27bn. The FSA should regulate in a way that encourages saving.”

Notes

1. The ABI is the trade association for Britain’s insurance industry. Its more than 400 member companies provide over 97% of the insurance business in the UK. We represent insurance companies to the Government, and to the regulatory and other agencies, and provide a wide range of services to our members. ABI member companies account for more than a fifth of investments in the London stock market.
   
   
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3. These figures cover stakeholder sales made by 47 out of the 48 registered stakeholder pension schemes, not only those of ABI members. They include transfers to stakeholder from other pension arrangements.
   
   
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