Lloyd's managing agents warn FSA regulation could threaten international market
Top Lloyd's managing agents have warned the Treasury that the burden of FSA regulation could threaten the future of London's international insurance market.
Insurance Times has learned that the Treasury has been briefed by senior executives from a number of London market companies, amid growing concern about the stifling effect of the FSA regime.
Representatives from Hiscox, Amlin, Wellington and Brit are understood to have met with Treasury officials.
A senior managing agent source told Insurance Times: "The Treasury wants to know why there have been so few start-ups in London since 9/11. John Tiner [FSA chief executive] has said it is to do with tax, but we think it is to do with the burden of regulation.
"The FSA regime is depressing the market and the Treasury understands this. The risk is that if nothing is done, the London international market will suffer. The Treasury is worried - and rightly so."
The source insisted that the FSA rule book needed to be "slimmed down".
He also said that the FSA's recent moves to speed up authorisation times to between four and eight weeks was "not quick enough".
"It should be quicker - one week," he said.
The Treasury confirmed it was currently carrying out a series of "practitioner dialogues", focusing on different market segments such as banking, insurance, capital markets, asset management and legal and accountancy services.
A Treasury spokesman said: "These dialogues are aimed at mapping out London's strengths and weaknesses, as well as identifying areas for deeper analysis, where the industry faces competitive challenges or opportunities exist, and examining the potential role for the government in addressing them.
"This work will feed into work on City competitiveness and promoting the City, announced by the Chancellor in the Budget."
Amlin and Hiscox said that they maintained an "ongoing dialogue" with all parties involved with the financial services sector on a number of issues, but would not comment on the latest discussions.
Meanwhile, it has been reported that the Lloyd's Market Association (LMA) has met Shadow Treasury minister Mark Hoban to discuss the impact of tax laws and regulation on the London market.
The LMA is understood to be asking for specific sections of the Finance Act 2000 to be repealed in order to make the market more competitive.