Prudential has been forced on the defensive over an e-mail sent to thousands of staff in which a senior executive appears to make a series of disparaging remarks about FSA policies.
In a leaked e-mail published by the Sunday Telegraph, Barry O'Dwyer, deputy chief executive of Prudential's UK business, describes the regulator's policy plans as "ludicrous" and "horrendous".
He also alleges "personal prejudices" of the FSA's consumer panel often "determine the direction of regulation" and "over-ride the evidence".
The e-mail, dated 9 March and circulated to 2,500 staff, says Prudential should up its lobbying efforts to change regulations it sees as "ill-judged".
O'Dwyer says suggestions from the insurance industry over RDR charging rules had been dismissed by the FSA, even though he said they would have meant a "simpler solution for millions of people".
"...The FSA issued some guidance last week about how they will treat future changes to products that have been sold prior to the implementation of RDR. I told them I thought their conclusions weren't perfect. We would have preferred to see existing business ring-fenced from the new regulations, which would have been a simpler solution for millions of people.
"The FSA had come to the conclusion that this was a wheeze to avoid the new rules and they couldn't be dissuaded from this view, regardless of the evidence to the contrary produced by the industry," O'Dwyer's e-mail says.
"When consulting on the new rules they floated some ideas that would have been horrendous for customers and so we had to fight a rearguard action to make sure they didn't implement some of their more ludicrous suggestions."
On the issue of with-profits funds, O'Dwyer said the FSA's consumer panel is often influenced by personal prejudice.
"It became clear to me how much the personal prejudices of some key individuals can determine the direction of regulation," he said. "Evidence sometimes seems to be over-ridden by prejudice."
The e-mail also reveals private discussions between the insurance industry and the pensions minister, Steve Webb, on restructuring workplace pensions.
Webb says rather than calling pensions defined contribution or defined benefit it might be better to call them "defined aspiration".
"Defined Aspiration would be where the employee is told the pension that he and his employer are aiming to produce but it wouldn't be guaranteed," the e-mail says.
According to the Sunday Telegraph, the revelation of the e-mail comes at a particularly delicate time as the FSA is overseeing a Section 166 probe into Prudential's failed $35.5bn (£24bn) bid for AIA.
Prudential admitted to the Sunday Telegraph the email was "misjudged".
"Prudential UK makes a point of communicating with its 2,500 employees in an open and transparent fashion, including through a light-hearted weekly email from Barry O'Dwyer.
"Clearly in this case his attempt to inject humour into his communication was misjudged.
"We work constructively and positively with government ministers and regulators on a wide range of issues to safeguard the interests of our seven million UK customers."
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