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Treasury denies Standard Life "conspiracy"

Date: Thu, 05 Feb 04 Analysis

LONDON, UK - A government minister has denied rumours of a 'conspiracy' against Standard Life in the wake of heated negotiations between the FSA and the troubled insurer.

Scottish National Party leader Alex Salmond became embroiled in the row when he expressed fears that new financial rules for insurers might put pressure on the firm to demutualise.

Regulators have demanded more transparency in reporting financial strength in the wake of the Equitable Life fiasco, causing Standard Life to announce that it was considering shedding its mutual status and floating on the stock market.

In a Westminster debate, Mr Salmond said mutual life insurance firms must not be forced into floating on the stock market by the new financial rules, adding that: "It would be unfortunate if a company was effectively chased out of mutual ownership."

Mr Salmond asked Treasury financial secretary Ruth Kelly whether the FSA might "perhaps inadvertently be prejudicial against mutual ownership and make it more difficult for a large company to stay in mutual ownership?"

Ms Kelly denied any conspiracy, adding: “We are committed to the mutual sector, just as we are committed to proper and realistic financial accounting to make sure firms realise the true value of their accounting and treat their customers fairly.'

FSA chief executive John Tiner said yesterday that the watchdog has "no view one way or another" on mutuality.

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