THE FINANCIAL Services Authority has hit back at criticisms of its new realistic reporting rules, claiming the solvency regime for insurers is simply "common sense".
According to the Scotsman, FSA head of insurance regulation David Strachan yesterday stressed the new approach would prove justified over the longer term.
Refering to the close scrutiny of Standard Life, he also pointed out that the regulator was not setting out to close down mutual life assurers or to "bleed with-profits dry".
He added: "Yes, we are in a period of readjustment, but ultimately the benefits of a more risk-sensitive and transparent regime greatly outweigh any short-term pain."
MEANWHILE, THE Daily Telegraph reports it was fears over increasing consumer debt that convinced the Bank of England deputy governor to vote for a rise in interest rates five times in the past six months.
Andrew Large yesterday revealed it was concerns over the prospect of a "sharp slowdown in demand" brought on by high levels of household debts that has made him vote for a rise in interest rates.
He voted with the majority for quarter-point increases in interest rates in November and February. He was also in a minority of one in voting for increases in January and December.
He said: "Each month when we on the Monetary Policy Committee make our policy decision I am conscious of the debt situation."
THAT SAID, the economy may not look at good as anticipated as today's Times reports Gordon Brown faces a massive shortfall after the Inland Revenue failed to collect £14bn of tax last year.
Figures, which are to be released by the National Audit Office later today, are also likely to cause Gordon Brown a slight uncomfort as he will be facing questions from MPs this afternoon over renewed warnings that he will be forced to raise taxes after the general election to avoid breaking his golden rule.
John Bourn, head of the NAO, said: "Much tax is collected quickly but at any one time there are billions of pounds outstanding, some of it long overdue.
"Faster recovery and preventing the build-up of debt could bring in money which could be used to improve public services," he added.IFAonline
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