THE FSA HAS finally come clean about the cost of the endowments scandal, saying it will cost UK insu...
THE FSA HAS finally come clean about the cost of the endowments scandal, saying it will cost UK insurance companies £650m to rectify.
The Daily Telegraph says the estimate is a blow to insurers already struggling because of fallen stock markets, and notes that the FSA is also saying it is preparing to levy substantial fines on certain companies.
FSA chairman Howard Davies is calling the insurers' behaviour a "disgrace", but he himself faces criticism over the FSA's handling of the crisis by the Consumers Association, which is pursuing its own plan to nail the FSA to the wall.
PROPOSED AMENDMENTS to a new EU directive on pensions that is heading for its second reading before the European Parliament could drive a stake through the heart of the UK government's plans for future pensions according to today's The Times.
The paper says that Germany has proposed that pensions providers be governed by strict rules limiting investments in stock markets.
If the new rules came to reflect the existing German system, then UK pension funds could become restricted to holding just 30% of their assets in shares, compared to more than 50% at present, and over 70% before the bear market struck in 2000.
That would wreak havoc on the UK stock market and force the end of DB schemes, The Times says.
THE TELEGRAPH reports that Norwich Union is proposing to accept the transfer of Equitable Life with profits pensioners into its own fund "if the society consents".
That could be a tough call, however, as Equitable has already put out a statement saying that this would not be possible as it was something made clear to policyholders when they took out their policies.
Current tax rules mean that annuitants cannot switch between providers unless both providers agree and the type of annuity does not change.
JAPAN'S BANKS are about to start announcing restructuring programmes that will deal with the huge amount of bad debt being carried on their books, the FT says.
The announcements come after a significant increase in government pressure in the past few weeks, which is on target to nationalise the worst performing banks if they do deal with the problem.
At least four banks are expected to use interim results meetings today to announce job cuts, capital raising, or other means of dealing with their bad debt.
BELGIAN-DUTCH insurer Fortis has reported a record €1.6bn loss for its third quarter and is warning that other insurers are likely to continue reporting quarterly losses, the FT reports.
Fortis' loss has been blamed largely on poorly performing stock markets, and it says it does not see a significant recovery starting until the end of next year.
THE GOVERNMENT is going to massively increase its borrowing in order to fund commitments to education and healthcare, The Times says ahead of this week's pre-Budget report to Parliament.
This could result in a doubling of gilts issued next year compared to previous plans, taking such borrowing to £48bn - levels not seen since the early 1990s, the paper says.
The paper says analysts now expect chancellor Gordon Brown to increase his net borrowing for 2002-3 from £11bn to £17bn, although extreme predictions see net borrowing spiralling upwards to hit £30bn by the 2003-4 fiscal year.
Exit fees and conversions
Initial FOC of 0.6%
Former PFS president
Last commission convened in 2002