Calls for FCA Boss Sacking

Calls for FCA Boss Sacking.

Pressure is mounting on Martin Wheatley, the chief executive of the financial industry regulator, the Financial Conduct Authority (FCA), to be sacked or resign.

The Association of British Insurers (ABI) alongside other parties such as the Treasury Select Committee (TSC) are thought to be extremely unhappy in how a leak occurred that insurers are to face an investigation into unfair consumer terms in policies that were sold from the 1970’s through to 2000.

As reported on this site last week, the FCA is to force insurers to look at high charges, penalties and unfair lock-ins that have created thousands of “zombie” insurance policies.

The leak caused huge sell offs in insurance company shares as investors digest the potential impact of compensation claims to be made and paid which, if found, could run into billions, as has been the case with all types of financial services mis-selling and compensation claims.

Comment

Insurers share prices have faced a ‘double whammy’ over the last two weeks.  First, was the Budget which confirmed that people will be offered greater pension flexibility and to not be forced to buy an annuity.  This will result in billions of pounds leaving insurers as consumers look at alternative ways of securing retirement income.

This new leak has further hit share prices and we suggest this creates a huge capital adequacy gap on insurers.

Ultimately, the blame stops at the top i.e. Mr Wheatley, but the damage is already done.  For too long, regulators have been allowed to blunder with no personal recourse and may be the TSC and the Government as a whole need to take a more serious approach to mistakes that regulators make instead of the bill continually been passed on to financial firms that run their businesses in the right way i.e. the good paying for the bad.