'Insurance industry stood up well during the global financial crisis'

The government today launched a consultation on proposals to strengthen the administration regime for insurers to ensure consistent treatment for policyholders of insurance contracts under the insolvency and administration regime.

"Both the insurance industry and the UK’s prudential regulatory regime for insurers have stood up well during the global financial crisis," it said in the Budget statement.

"The government in the light of its review of other insolvency regimes, is seeking to refine the administration regime for insurers to ensure continuity of payments and protection for policyholders, should an insurer go into administration.

"The proposed changes also include legislation that introduces regulation making powers. These powers will ensure that if the FSCS takes action to protect policyholders in life assurance contracts, there will be broadly the same tax treatment in place as if the FSCS had not intervened."