The Government is accused of 'strangling' insurance firms
Greater joined-up thinking across Government depart- ments is needed to address the pension and savings gap, according to Ron Wheatcroft, technical manager at Swiss Re.
He also warned that the prohibitive cost of regulation might contradict efforts of other Government initiatives, such as the Sandler report, to encourage those with lower incomes to purchase adequate protection and life cover.
Speaking at the COVER-supported All Party Parliam- entary Group on Insurance and Financial Services' meeting on the future of regulation at Westminster recently, Wheat-croft said: 'There is a real risk that if the cost of regulation is too high many distributors may leave the market, leaving low to middle income earners with less choice than they have currently. The impact of regulation should not cause such market shrinkage and exclude those that the Government, through the Sandler report, is trying to bring back into the market.'
Wheatcroft's comments ech- oed the sentiments of John Greenway MP, also speaking at the meeting, who lambasted the Government for 'losing its grip' on regulation and 'strangling' insurance firms with associated costs that are 'getting out of control'.
While Wheatcroft conceded that addressing the savings and pensions gap was not directly the aim of the Financial Services Authority (FSA) , he said there ought to be a greater collective effort and collaboration bet- ween the FSA, the Department for Work and Pensions and the Treasury to achieve Government targets.
He concluded by welcoming the FSA's proposals in consult- ation paper 187, which dropped the high-risk categor- isation of critical illness, income protection and private medical insurance. 'If these prop- osals had gone through, the consequences would have been great.'
Richard Adams is senior reporter on Post Magazine
