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MP accuses life insurers of complacency

Date: Tue, 11 Nov 03 Analysis

LONDON, UK - The Treasury Select Committee, a key parliamentary body, has lashed out at the British life insurance industry at a time when the sector is already dealing with weakened balance sheets, company closures and a spate of mis-selling scandals.

The Treasury Committee is currently carrying out an inquiry into the savings and life insurance sector following last month's inquisition of bank bosses over credit card charges and transparency.

It is expected that the chief executives of the UK's major insurance companies will be called to answer charges against them in front of the committee over the next couple of months.

Angela Eagle, a member of the Treasury Select Committee, described her view of the sector to Mary Francis, Director General of the Association of British Insurers on Tuesday: 'Misrepresentation of the products, bribery of the distribution channels, that's about it in a nutshell.'

Ms Eagle accused the industry of complacency over the mis-selling of endowment mortgages and precipice bonds, high-risk savings products that are linked to stock market fluctuations.

Ms Francis, however, chose to defended insurers' performance, pointing to the low level of complaints by people holding endowment mortgages and a recent survey which showed that savers had more confidence in their pension providers than the government.

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