ASB to probe insurance industry accounting

Link: Penrose offers little hope for policyholders

Financial secretary Ruth Kelly told MPs that she had asked the standard-setter ‘to initiate a study into the accounting for with-profits business by life insurers’.

Delivering her statement on Penrose, she said: ‘The study will have particular emphasis on identifying ways of improving the transparency of reporting.’

Kelly also announced that Paul Myners will lead a review into the corporate governance arrangements applicable to mutual life offices in comparison with that for companies and review the level of regulation of mutuals by the FSA.

She said: ‘The government sees no reason in principle why boards of mutual life offices should not be as accountable to their members as those of comparable companies are to their shareholders.’

A third ‘wide ranging review’ will be carried out into the actuarial profession – whose lack of professional standards came in for savage criticism from Penrose.

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