"Tiner move spells despair" (19 December, Insurance Times), then let's stop moving deck chairs on the Titanic.

What with Howard Davies leaving the sinking ship, John Tiner having an accountancy, and not an insurance, background and regulation being fundamentally flawed, isn't it time for those of us who do understand and learned their insurance before it was exempted from the Unfair Contract Terms Act [1977] to salvage SS Insurance?

On the evidence of unit-linked life policies, the Equitable Life affair and the pensions shambles, it is evident that insurance has lost its way and the regulators do not understand what they are doing,

Examples are: the Treasury being responsible for the solvency of insurance companies; and the irreconcilable difference between savings and investment.

Similarly is the evidence of the Independent Insurance affair and the liability crisis. Until the regulator understands insurance is founded on need and trust and its function is risk management, which works by smoothing peaks and troughs (the good times and bad times of life) by sharing the losses of the few among the many - an objective which depends on price fixing - how can we hope to solve the liability crisis until the premium, which is cost plus, is acceptable to the many?

John Lynch
Insurance Advisory Service

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