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Latest Press Releases And Comments

Here we cover all the very latest news. If you have a specific enquiry or something you’d like to find out about, please get in touch. Contact Martin Shaw at AFM via email martin@financialmutuals.org or call 0788 754 7195.

30 June 2011

Martin Shaw, CEO of the Association of Financial Mutuals whose members provide insurance products, calls for the industry to implement its own code of conduct as an interim measure to a ban on the payment of referral fees

“The Association of Financial Mutuals supports yesterday’s calls on the outright ban of referral fees as opposed to greater transparency but  we recommend that in the meantime the insurance industry proactively takes action and sets up its own code of conduct, which we would be very happy to help develop.  No motor insurance provider within AFM sells customer data to other organisations and our members give their strong support to the campaign to introduce major reform in this area.

 

“Ex-Home Secretary Jack Straw has criticised insurers who have been dragged into the practice.  In line with our mutual values, we seek always to work in the best interests of customers and encourage other insurers to follow suit: in our view the practice of selling customer data contributes to the cost of insurance and the compensation culture, and is not therefore in the interests of the customer.”

30 June 2011

Martin Shaw of the Association of Financial Mutuals reacts to Mark Hoban’s proposed gender consultation with the Insurance Industry

“March’s  Gender Ruling was greeted with a resigned sense of disappointment because it is bad news for consumers. They are the ones who will get a worse deal as a result.  The insurance industry was exempt from previous gender legislation because there is clear evidence that it is a fair basis on which to reflect different risks. Therefore, to ignore gender in insurance would be to discriminate not only against young female drivers but male annuitants as well.”

“Insurers are already beginning to adjust pricing and practice to take account of the ruling, so early clarity from the UK Government and Brussels is vital.”

For further comment, please contact Andrew Lyons (+44(0)20 3128 8518 / andrew.lyons@mhpc.com)

14 May 2011

Martin Shaw, Chief Executive at Association of Financial Mutuals comments

"Rumours of the demise of the Child Trust Fund are very much premature.  The statement issued yesterday indicates the Government is seeking to reduce payments for higher earners.  That suggests quite clearly keeping the product universal albeit it at a lower cost to the Exchequer.  This is very consistent with the talks that the Association of Financial Mutuals, whose members manage over half of all CTFs, has been having with political parties for some time, and we are keen to work with them on that basis.

The Child Trust Fund has been a highly successful product, with millions of parents savings for their child's future.  Stopping payments to people earning over £16,000 now would undermine the product and destroy child saving- this flies in the face of wider Government policy."

11 May 2011

Martin Shaw, CEO of the Association of Financial Mutuals (AFM) responds to Mark Hoban’s comments at the All Party Parliamentary Group for Building Societies and Financial Mutuals

 “When giving evidence, the Minister stressed that the government is neutral on ownership and was reluctant to offer a view on the sector’s virtues or on the FSA’s attempts to undermine the business model. As the "Minister for Mutuals", this lack of engagement is disconcerting and is comparable to a Minister for Pensions who is unsure on the case for retirement planning.

 “A stronger mutual sector will contribute to financial stability and help increase access to financial services. We continue to speak to the Treasury, providing evidence of the Mutual sector’s value and the danger of the FSA's approach”.

11 April 2011

Martin Shaw, CEO of the Association of Financial Mutuals, responds to the Treasury's consultation paper: A New Approach to Financial Regulation: Building a Stronger System

There is significantly more detail in the new consultation which provides much more assurance as to the way financial regulation will be conducted in future.  We are broadly supportive on the approach proposed.

In the recent past we have seen regulators respond in what we often regard to be a cavalier manner to political criticism of their contribution to the bank-inspired financial crisis.  This has resulted in sometimes poorly designed, reactive regulation, both in the UK and in Europe, which has placed new and disproportionate burdens on many firms which do not pose the same systemic risk. 

We believe that the new architecture proposed will make this less likely, so long as supervisors properly understand the markets they are regulating, and act in a manner that is balanced and proportionate, both to the likelihood and the impact of any risks they seek to address.

The received wisdom in regulation and legislation is that the shareholder owned model is superior, or else that the time spent regulating different business models in a more appropriate manner is not worthwhile.  We are grateful therefore that the coalition Government is seeking to promote diversity of ownership and seeks way to ensure that regulation is more aligned with this ambition.

We believe independent day-to-day management of the FSCS and FOS will not be compromised by drawing them more closely into the regulatory system.  We conclude that both FSCS and FOS should become subsidiaries of the FCA.  This approach does not compromise their core role, but does ensure that management of the FSCS and FOS align with the regulatory system as a whole.  We have seen numerous instances where process failure within each of FSCS and FOS has risked undermining the regulatory system, and continued lack of proper accountability will continue to pose a threat.  The benefits of seeing FSCS and FOS as subsidiaries of FCA include:

  • Joined up approach to regulation across all regulatory bodies
  • More effective information sharing and informed decision making
  • Improved early warning systems
  • Better capacity to act quickly on emerging issues
  • More visible attention to regulatory process
  • Shared commitment to work with a common but proportionate consumer protection   purpose
  • Less risk of ‘back-door regulation’
  • Cost synergies that result from shared services and single management lines. 

To speak to Martin Shaw in more detail about AFM’s response, please contact Stefanie Ives on Stefanie.Ives@mhpc.comor 0203 128 8585.

 

23 March 2011

Commentator: Martin Shaw, CEO for the Association of Financial Mutuals

Availability: Now

Input available: Confirmation that the Junior ISA will be launched in November is a welcome development as the need to build up a nest egg for milestones such as student fees or a house deposit is more vital than ever. We believe the Junior ISA will be the primary savings account for families and AFM and its member are planning for this exciting new product. However, while previously, every child would receive a Child Trust Fund and a voucher at birth, we regret that this will not happen for the Junior ISA.  As a result, poorer families in particular will be disadvantaged.

Please note: AFM has compiled comparative figures for a child reaching 18; one with a CTF and one with a Junior ISA to show the difference in monetary terms. These are available on request.

18 March 2011

Reacting to the confirmation of the Junior ISA’s launch, Martin Shaw, CEO for the Association of Financial Mutuals said

Today’s announcement that the Junior ISA will be launched in November is welcome as the need to build up a nest egg for milestones such as student fees or a house deposit are more vital than ever. We believe the Junior ISA will be the primary savings account for families and AFM and its member are planning for this exciting new product.

However, while previously, every child would receive a Child Trust Fund and a voucher at birth, we regret that this will not happen for the Junior ISA.  As a result, poorer families in particular will be disadvantaged.

Attached are comparative figures for a child reaching 18 – the scenarios concern one young adult with a CTF and one with a Junior ISA.

To speak to Martin Shaw, please contact Stefanie.Ives@mhpc.comor 0203 128 8585

01 March 2011

Martin Shaw, CEO of Association of Financial Mutuals reacts to the European Court of Justice ruling on gender

“In the short term, there will be some negative impact on the cost to the consumer but markets such as motor insurance and annuities are competitive and, over the longer term, insurers will look to develop more sophisticated techniques on which to base their assessment processes. In practice, this will mean that aspects such as health and lifestyle will become more important as insurers look to calculate risk by another means.

“The ruling provides for the removal of gender discrimination from 21 December 2012, and this is a welcome transition which will allow firms to hold current rates in the short term whilst they consider how they reprice products and begin to build new models.  So whilst it is possible that cohorts such as female drivers and male annuitants may lose out, we foresee that the overall impact will be short term and limited.” 

Martin Shaw is available for comment on the ruling today.

25 February 2011

Reacting to the FSA’s proposals for “with profits”, Martin Shaw CEO of the Association of Financial Mutuals comments

We welcome the Regulator’s willingness to listen to the industry and we are pleased that the FSA has shown some flexibility on issues that are important to the Mutuals’ sector. Flexibility on matters such as new business thresholds will benefit our members – we will, of course, continue to work with the Regulator to ensure the Mutual voice is heard on these important industry matters.

03 February 2011

Martin Shaw, Chief Executive of Association of Financial Mutuals (AFM) comments on the impact of the supplementary FSCS levy on mutual insurers

"Whilst IFAs have been very vocal in expressing concern about the impact of the supplementary FSCS levy, they did at least have the advantage of early warning.  Meanwhile mutual insurers and friendly societies have been issued demands, receiving neither notice nor explanation and being left with little time to pay." 

"One AFM member tells me they are being required to pay a supplementary levy at a rate of 15,000% of their normal annual levy. From our perspective, we feel the way the FSCS has managed this situation borders on irresponsible and raises serious questions about the FS Compensation Scheme. 

"It’s never been more crucial for the new Financial Policy Committee to make sure the Consumer Protection and Markets Authority not only regulates properly, but also increases the accountability of the compensation scheme and the Ombudsman by placing them under the control of the CPMA."