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Insurers feel weight of regulatory burden

Date: Mon, 07 Apr 03 Analysis

LONDON, UK - The beleaguered British life insurance industry is currently besieged by numerous, recently introduced regulatory procedures, according to reports in today's Times, which is adding substantial costs at a time of financial strain.

The regulatory burden imposed by the City watchdog, the Financial Services Authority (FSA), is set to expand further from the 150 papers enacted so far since the FSA assumed responsibility for the industry 16 months ago to 264 papers within the next two years.

The FSA acknowledges that a lot of new frameworks have been introduced but regard them as necessary in order to modernise a sector that has lost much public confidence.

The Times suggests that the cost of simply responding to regulatory papers costs tens of millions of pounds, whilst the cost of actually implementing the changes runs to several billion pounds.

Francis McGee, head of regulation and strategy at the Association of British Insurers, which spends £1.27 million pounds annually responding to various regulations, told The Times that the growing liability was causing increased concern.

The financial editor of The Times business supplement, Graham Searjeant, last week highlighted this growing burden and called for the FSA to 'turn over a new leaf' and assume a 'less interfering' mantle.

'The need is to restore confidence in the industry and its products, not by damning its past performance and strapping it to a production line of reform, but by working with the industry and its owners to strengthen its finances,' Mr. Searjeant argued.

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Endsleigh Insurance Services Limited is authorised and regulated by the Financial Services Authority. This can be checked on the FSA Register by visiting its web site at www.fsa.gov.uk/register.
Endsleigh Insurance Services Limited. Company No: 856706 registered in England at Shurdington Road, Cheltenham Spa, Gloucestershire GL51 4UE.