FSA investigators are swarming about HBOS after the company was told to hand over documents relating to operations in Bristol and Aylesbury, The Daily Telegraph reports.
These, of course, are the headquarters respectively of its Clerical Medical and Equitable Life with profits administration operations.
The paper says the FSA refuses to comment on the alleged investigation.
There is no suggestion the financial strength of HBOS is under threat, the paper adds, rather it is the handling of Equitable Life policies coming under scrutiny following complaints from policyholders.
Halifax bought the unit-linked and administration arms of Equitable shortly, including the Aylesbury administration HQ shortly after Equitable closed to new business in December 2000.
The Telegraph says its information indicates the investigation is proceeding under a so-called Section 166, also known as a “skilled persons report”.
The name derives from the fact the FSA will appoint a professional group, such as a legal or actuarial firm, to carry out the investigation.
The Telegraph says Standard Life was threatened with a Section 166 earlier this year when it was forced to admit FSA help in developing realistic reporting of liabilities
ON ANOTHER REGULATORY issue, The Scotsman reports the 21 providers targeted by the FSA for compensation over the splits scandal are putting together a revised last-ditch plan to avoid potential disciplinary action by the regulator.
Part of the plan would include upping the amount of money on offer by way of compensation to £200m, up from the previous offer of £120m, but still way short of the FSA’s preferred figure of £350m.
Rumours suggest the bigger splits players, such as HSBC and UBS would even be willing to pay more than their fair share into the compensation pot just in order to put the whole issue to bed.
However, indications are the FSA has already split the providers, as at least four of the firms have allegedly entered mediation with the regulator.
The Scotsman adds Aberdeen Asset Management so far seems to be the only firm that will try to have its day in court to defend itself against the FSA’s actions rather than agree to mediation or pay compensation through a group pot.
THE TOUCHY-FEELY approach to improving confidence in savings in the UK published by former GlaxoSmithKline chairman Richard Sykes has received a cool reception from industry associations, the FT says.
The ABI, as the chief association affected by the proposals issued yesterday, has merely responded it will look at Sykes’ recommendation for a code of conduct, but only after “Higgs, Sandler, Pickering and Myners”.
The IMA responded it was disappointed most of the 52 specific recommendations “were directed at fund mangers.”
"We weren't responsible for Enron, WorldCom and conflicts of interest at investment banks,” said IMA chairman Lindsay Tomlinson.
ANOTHER AVENUE OF CRITICISM has opened up against the FSA on the issue of implementation of EU insurance directive rules because of a lack of response to questions from insurance industry associations, the FT reports.
The Association of Insurance and Risk Managers in Industry and Commerce, representing mangers buying insurance on behalf of their companies, has complained the FSA has for nine weeks sat on the question of whether such managers need to be regulated or not under the new rules.
With a 13 July deadline for applications fast approaching, AIRMIC accuses the FSA of failing to define the term “by way of business” , with those in the industry feeling there is no need for regulating the status of risk managers performing business without contact with consumers or acting as intermediaries.
WARNINGS FROM Bank of England Governor Mervyn King that house prices could go into reverse has been followed by a statement from Countrywide, one of the largest estate agents, that record high property prices are forcing an increasing proportion of borrowers to look at interest-only mortgages.
Rising interest rates will “dampen” the market, but there is not evidence yet of a “sharp correction” in prices or volumes.
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