AUDITOR ERNST & YOUNG may yet settle their £2bn case our of court with Equitable Life as the prospect is "inching closer", reports this morning's Guardian newspaper.
A recent admission from Ernst & Young indicated the firm might be willing to negotiate a settlement in the case, with the Guardian yesterday hearing hints the beleaguered insurer may be prepared to accept a fraction of the sum.
Language appears to have softened since the warning shots fired as a spokesman for Equitable is quoted as saying:
"If we have to, we will see them in court next April. If either party wants to pick up the phone and make the society a serious and substantial offer of settlement, the board will give it every consideration," says the spokesman. "If a compromise can be reached that everyone can be happy with, then the board will listen."
A NATIONAL INSURANCE loophole for pension scheme members - revealed yesterday in the national press - is not going to be closed, according to the Daily Telegraph.
The gap in NI already allows hundreds of thousands of workers to avoid paying contributions, however, it is now likely to stay even though the Treasury had warned it would introduce a range of reforms on pre Budget Thursday designed to clamp down on corporate tax avoidance.
Under the scheme – adopted by Sainsbury and many other pension schemes - the employee's salary is lower so NI payments for both company and employee are reduced and companies then do not have to pay any tax or national insurance on the pension contributions they make on behalf of their staff.
FRIENDS PROVIDENT is seeking to raise around £380m to boost its capital position for regulatory purposes by securitising part of its life book, says this morning’s Times.
The deal is expected to be announced today once approval is sought from the FSA, and is a significant deal because such capital raising is said to be rare in the UK and this is only the third such life securitisation attempt.
Securitisation would allow the insurer to benefit from an immediate capital injection, remove some of the uncertainty about its life business from its books, as well as give investors the opportunity to gamble on whether the business will turn out to be profitable in the long term.
The Underwriter, an insurance business launched five years ago, was yesterday given a public censure by the Financial Services Authority and its former chief executive was fined £20,000, continues the Guardian.
Keith Rutter, chief executive of The Underwriter, was found to have circumvented the regulator's rules between December 2001 and March 2003 but spared a tougher penalty than his £20,000 fine after cooperating with the FSA.
The FSA says it kept a close eye on the firm since its launch in 1999, however, the regulator later noted Rutter was undertaking action to split insurance contracts written by the company and defer premiums to the following year so it would not breach official premium income limits.IFAonline
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