European MPs are demanding the European Commission launch an investigation into UK insurance regulation after the financial debacles at Independent Insurance and Equitable Life.
UK MEPs are lobbying Internal Market Commissioner Frits Bolke-stein to take strong action against the UK government's regulatory system and to investigate the effectiveness of the Financial Services Authority (FSA).
Conservative MEP for the South East, Roy Perry, has written to Bolkestein, asking him to review the situation in the weeks running up to a major decision from Brussels on whether to prosecute the government over its regulation of Lloyd's of London.
“Bolkestein has taken the Lloyd's issue very seriously and we expect a ruling by September,” Perry told Insurance Times. “What needs to be investigated in the case of Independent and Equitable Life is whether the EU insurance directive, which requires a company to operate with adequate reserves to cover its existing liabilities, has been broken. If so, the government must take action,” he added.
He also said questions should be asked concerning the Insurance Times report last month that the FSA was tipped off about irregularities in Independent Insurance's practices by its French counterpart six months before the insurer's collapse.
“We need to question the French authorities on who did tell the FSA or, if they did not, as the FSA claims, why didn't they? It is something I hope the Commissioner explores,” said Perry.
Under EC law, UK citizens can petition Brussels on whether the EU directive has been broken, which could lead to the UK government being taken to court.
“It is often the case that small policyholders or private individuals are put off by the thought of enormous legal fees. If the EC finds the allegations are true, then it takes on the legal costs. I would encourage anyone who feels seriously enough about the Independent liquidation or Equitable Life's problems to petition Brussels,” Perry said.
Details of the EC Petition Committee and its work can be found at europarl.eu.int
Roy Perry can be contacted via email: email@example.com.