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More with profits funds to close

Date: Wed, 17 Mar 04 Analysis

LONDON - More with profits life insurance funds could be set to close, according to the UK's financial services watchdog.

David Stuart, an insurance specialist at the Financial Services Authority (FSA), said this week that recent closures may not necessarily bring an end to the recent difficulties faced by the sector.

A number of high profile firms have already closed their funds to new investors.

Both Aviva and AXA have said they will cut bonuses this year.

"Despite the recent rebound in equity values, life assurers are continuing to cut bonuses on with-profits policies," Mr Stuart told a conference in London.

"The current economic climate and the strategic changes facing life companies means, I think, we may see more closures."

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