Tories would set up independent board from within the industry to supervise FSA
Conservative MP Richard Spring pledged to lighten the regulatory touch if the Tories are elected at the forthcoming election.
Speaking at the Insurance Times Making Money from SMEs conference, Spring, the shadow minister for economic affairs, said the Conservatives would set "a new remit for the FSA".
Spring said competition and competitiveness were at the centre of the insurance industry. "Anything that threatens that is going to be damaging to the whole industry and is therefore counter- productive."
An independent board would be set up to oversee both the FSA and the Ombudsman, said Spring, with a subcommittee looking at insurance operations. The chair would be appointed from within the industry. "After six months we would want to see a demonstrably lighter touch," he said.
Spring, who is chairman of the small business bureau parliamentary advisory group, added: "We will roll back over time the regulation which we think will strangle the industry that is so important to this country."
He rejected the idea of a European insurance regulator, and said the party would press for an "immediate moratorium" on any new EU legislation for the industry.
"The UK will not implement any new regulation until other EU countries were well on the way of doing the same, creating a level playing field across the EU."
Lib Dem accuses FSA of failing in its duties to consumers and firms
The Liberal Democrats Treasury spokesman has slammed the FSA for failing in its duties to consumers and regulated firms.
Speaking at the ABI conference last week, Vince Cable blasted the regulator for failing in its "conflicting duties" of promoting stability among companies and acting as a watchdog for consumers. "Industry is over-regulated, and yet consumers are still vulnerable to the worst aspects of financial selling," he said.
David Willetts, Conservative party shadow pensions secretary, said the government was partly responsible for undermining public perception of the insurance industry.
He said the tendency of the Treasury Select Committee to name and shame failing insurance companies "led to widespread distrust among consumers".