FSA chief's fear on insurance regulation

FINANCIAL Services Authority chairman Sir Howard Davies today raised further questions about the watchdog's role in the affairs of Equitable Life and Independent Insurance, saying changes were needed in the way the insurance industry was regulated.

"These two unrelated cases have raised questions about the overall adequacy of regulation surrounding insurance companies. We accept that change is needed," he said.

In respect of Equitable, he added: "It is no surprise that questions were raised about the past and current regulation of the society."

He said a review of the FSA's role in Equitable would be completed this summer and handed to the Treasury. "More changes may emerge from the Equitable review," he said.

Speaking to Business Day before the meeting, Sir Howard said the FSA had no plans to carry out an internal review of its role in respect to Independent. He denied that he had come under pressure to probe the adequacy of the monitoring of the insurer.

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