U.K. Regulator Monitoring Spitzer Probe

October 19, 2004

The U.K.’s Financial Services Authority (FSA), which oversees Britain’s banks, insurers and financial service providers, is reportedly watching the unfolding of New York Attorney General Eliot Spitzer’s probe of the insurance industry with interest.

David Strachan, the FSA’s sector leader for insurance, has been quoted by several sources as saying that his organization was following developments in the case. There has been no indication – as yet – that the FSA is planning any similar investigation.

Strachan’s office officially takes over direction of the U.K.’s insurance industry in January. It has been preparing for the task for over a year. Speaking at the recent European Insurance Summit in Vienna, Strachan stressed his office endorsed the European Union’s “three pillar approach” to regulation, which he described as examining “capital requirements,” conducting frequent “supervisory reviews” and obtaining “full disclosure” in order to enforce “market discipline.”

While the FSA’s primary emphasis is on insurer solvency, those parameters are certainly broad enough to support an investigation into insurers’ and brokers’ market conduct as well.

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