Select committee to examine if regulator's rules affect UK's competitiveness
The House of Lords is to investigate the effectiveness of the FSA and whether its rules are damaging the UK's international competitiveness.
The review is part of a wide-ranging examination of the workings of the UK's major economic regulators that includes the pensions regulator and the Competition Commission.
Chaired by Lord McIntosh of Haringey, the select committee will consider the impact of regulators on competition within their industry and on the UK economy's competitiveness internationally.
It will assess how the regulators are interpreting their statutory duties and whether they are meeting their objectives. The committee will also look carefully at the financial performance of regulators and assess the extent to which they are cost effective.
The committee will also examine regulators' effectiveness in protecting the interests of consumers and will consider what further scope exists for better co-operation between regulators.
The review will be welcomed by the insurance sector, as many see the FSA's rules as overly burdensome.
There are fears, particularly among those working in the London market, that the FSA's regime could threaten the future of London as an international insurance market.
In August senior executives from some of the top Lloyd's insurers warned Treasury officials of the stifling effects of FSA regulation.
Last week, ABI director general Stephen Haddrill called on the government to ensure the FSA had a duty to promote competition in the market, a duty that it currently does not have.
"We must not damage a competitive environment for the many in order to solve the problems of a few," he said.
McIntosh said: "Regulators play a crucial role in the UK economy. It is vital that their input is effective in keeping our markets open and competitive.
"Our inquiry will be broad in scope and will touch on many issues relating to the regulatory state. I would encourage all interested parties to submit evidence."
The committee will report in November 2007. The deadline for written submission of evidence is 9 February.