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Even though it is just over a month since the general election delivered the UK’s first coalition government for a generation, the sight of Conservatives and Liberal Democrats together has become a surprisingly familiar one.

The confusion surrounding the insurance sector’s regulatory framework is one of the many muddy outcomes resulting from the agreement between the two parties.

The Conservatives went into the election with a firm promise to scrap the FSA and transfer its regulatory responsibilities to a combination of the Bank of England and a new body, the Consumer Protection Agency.

But Lib Dem opposition appears to have put paid to these plans. The coalition agreement is opaque, merely referring to the government’s commitment to transfer macro-prudential regulation to the bank.

Chancellor George Osborne – understood to be pushing still for the FSA to be stripped of its powers – is expected to show his hand on regulation when he delivers his annual Mansion House speech next week.

Less than a week later, he will present his first emergency Budget in which there could be welcome news for insurance on the taxation of foreign branches. But both capital gains tax and insurance premium tax are expected to rise. A Tory-led government increasing CGT? It seems that expecting the unexpected is the main lesson from the first month under the coalition.