A high-profile meeting between London insurers and government officials on market competition has ended in stalemate, with no progress made on the issue of taxation concessions.
Lloyd’s chairman Lord Levene gave a presentation during the summit to members of the insurance market, the economic secretary to the Treasury Kitty Ussher, Treasury officials and the FSA, about the issues plaguing London’s ability to stay competitive.
But the day before the meeting, the government said it would not reduce corporation tax – thought to be a key focus of Levene’s working group (News, 8 November)
Peter Staddon, head of technical services at Biba, who was at the meeting, said: “Many could view this meeting as being a fruitless task. However, it needed to be said and I am sure that Lord Levene will try his utmost going forward.”
“Lord Levene did pose a question regarding a taxation concession, but in the world of ever-mounting trade deficit, this was a long shot.”
Levene had been commissioned to give the presentation by members of the high-level financial services committee.
The summit focused on what made Bermuda such formidable competition and looked at issues such as the country’s proximity to the US, light regulation and, most importantly, zero taxation.
A Lloyd’s spokesman said: “Following the meeting, we will continue the constructive discussion we have been having with the Treasury on broader tax issues.”
He added: “But tax was not the only issue discussed at the meeting – training, recruit-ment and improving effici-ency were also on the agenda.”
Fitch warns on reform targets
Fitch Ratings has warned that the London market will not hit a key electronic reform target by the end of the year because reform is non-mandatory.
Mark Nicholson, director of insurance ratings at Fitch, said: â€œTo achieve 100% compliance with the electronic claims filing by the end of the year will be difficult as, notwithstanding the progress made since the end of September, in this sort of not mandatory reform there are always a few 'late adopters' who will prove the most difficult to corral.â€
But Nicholson said the difficulty in persuading a few companies to adopt electronic claims files systems by the end of the year would not affect the overall rating attributed to Lloydâ€™s â€“ as long as improvement continues.
â€œBut even if they should miss the targets by a narrow margin, it would still represent a major step forward.â€