Bluefin boss attacks Tory threat to FSA
THE HEAD of one of the UK’s largest insurance brokers has hit out at shadow chancellor George Osborne’s plans to scrap the tripartite system of regulation, accusing him of “pandering to public sentiment”.
Howard Fryer, managing director of Axa-owned broking giant Bluefin, has said the insurance sector would face costly turmoil if Osborne goes ahead with his pledge to scrap City watchdog the Financial Services Authority (FSA).
“The industry would have to start all over again and it would mean more costs for the end-consumer,” he told City PM. “Has anybody actually thought this through?”
Fryer’s remarks underscore mounting concern in some areas of the financial services industry that Osborne’s FSA plans will lead to regulatory chaos.
Osborne has promised to scrap the FSA in the likely event of the Tories winning a 2010 general election, and hand its powers to the Bank of England and various other bodies.
Fryer said insurance has already completed massive reforms since coming under FSA control.
And he said that if the FSA’s powers are divided up, it will mean a regulatory change on a scale will inevitably lead to a great deal of paperwork, training and consumer education.
“Who knows – it might be that somebody is clever and says, ‘Ok we can achieve this seamlessly, we will just change the names and addresses’. Somehow I doubt it,” he said.
He added non-life insurance brokers have just got through a massive period of turmoil after FSA regulatory control began in 2005. “We would be back to square one again,” he said. “We have only just started a find a rhythm, but now we find ourselves caught in the same trap again.”