No bonuses for FCA executives following life insurance probe
16th December, 2014
The Financial Conduct Authority has scrapped bonuses for some senior executives amid criticism into their handling of publicity surrounding a life insurance review in March this year. The nine executive committee members who work for the UK financial regulator will have to wait until the April 2015 report to find out if the bonuses will be issued. This decision was taken as a result of the FCA's briefing of the Daily Telegraph on plans to review sales of life insurance policies – a move that saw insurers’ shares plummet and an external investigation ensue.
Following attacks on the FCA by numerous officials, including Chancellor George Osborne, the regulator announced yesterday that three members of its executive committee would step down during a restructure of the organisation. Clive Adamson and Victoria Raffe - who both work in financial services - will leave in January, while Zitah McMillan, the FCA's Communications Director, will depart this week.
The article published by The Daily Telegraph earlier this year resulted in insurers' shares shedding as much as £4.2bn from their market value and sparked an immediate investigation led by Clifford Chance LLP Lawyer Simon Davis. The fallout came amid a turbulent year for the British insurance industry following the government's decision to reform pension rules. Retirees are now free to compare life insurance quotes and draw on their pension pots instead of being forced into buying an annuity.
The results of the FCA enquiry are expected to be published this week.