The FSA has put a quarter of the UK's 900 odd insurance companies on high-risk watch according to in...
The FSA has put a quarter of the UK's 900 odd insurance companies on high-risk watch according to information leaked to credit-ratings agency Fitch reported in today's FT.
This is unlikely to help the image of the industry, already reeling from consumer criticism stemming from issues such as Equitable Life and with-profits-bonds, and indeed Fitch says that putting such a large number of companies, some 200, on a high-risk watch implies that a tighter regulatory regime is coming sooner rather than later.
The FT quotes Ned Cazalet as saying: "An awful lot of life assurers must be seriously concerned about their financial position. A number will now be reporting on a quarterly or even monthly basis to the regulator, which will be keeping a beady eye on them."
If their game is not raised then there could be a big shake-up in the sector, Cazalet adds.
The Scotsman wades into the fray with its piece declaring that the Financial Ombudsman is about to review the Equitable Life's legal action against former directors after the Equitable Late Joiners Action Group (ELJAG) sent a letter to the Ombudsman asking why Equitable had not yet provided the evidence on which the case is supposed to be built.
Equitable has answered that it is none of ELJAG's business what evidence it might or might not be sending to the Ombudsman as part of a legal case, but that answer is unlikely to put off members of the group, which represents people who joined the life company after it became aware of pensions liabilities in 1998.
It is not just in the UK that fund management teams are under pressure due to performance figures, as the FT today reports on the resignation of Tom Bailey, co-founder of Janus, the fund manager that made huge strides on the back of the technology bubble of the 1990s.
Janus' net asset value is half of what it was two years ago, and the falls in the value of its mutual funds has hit smaller investors particularly hard.
Still, it is hard to feel sorry for Bailey, who only last October sold out his remaining 6.2% stake in Janus for more than $600m.
The Times reports that the International Monetary Fund fears that Enronitis could lead to further sharp falls in global equities markets until accounting issues are knocked on the head.
The problem is that markets are waiting for a recovery in corporate earnings before going on a share buying spree, but because of distrust of company accounts many investors are not buying even when there is evidence of improving earnings.
The problem is most widespread in the US, but the IMF says it sees the issue spreading to equities markets worldwide.
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