June 17, 2010

Governments come and go, it seems. And so do regulators. The ABI can barely contain its slack-jawed consternation at the thought that all the time and money spent by insurers preparing for and attempting to comply with FSA regulation may turn out to have been a complete waste of time (and money, obviously).

Insurance Times reports that ABI director general Kerrie Kelly reacted to Curious George Osborne’s Mansion House speech threatening to scrap the FSA with the following seemingly impenetrable statement: “The insurance industry is open minded to changes to the regulatory structure, but it is very important that any proposals do not add to avoid adding further costs which will ultimately fall to consumers.”

Was KK at the Mansion House dinner when she uttered these perplexing words? Had she been drinking? Or was she attempting to say something really subtle and complex that Bankstone News’ tiny brain can’t quite find its way around?

“The insurance industry has already invested a huge amount of time and money in regulatory changes over the last ten years, which was one of the reasons insurers came through the financial crisis in robust shape,” she continued in a brave attempt to persuade her members that it was all the great work they had done on regulatory compliance, rather than simply having a rather more conservative investment strategy and generally being less sexy, that had stopped them going the same way as Lehman Bros.

“It is also crucial that insurance companies and banks are overseen by the same regulator,” she went on, now sounding considerably more sober, if a little stilted. “Insurers are a major part of the economic and financial system and, as major investors, have a direct interest in and impact on banking.”

If that doesn’t put Mr Osborne straight, nothing will!


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