Legal and General chief set to slam insurance plans

The head of Legal and General is due to criticise regulators’ plans to place capital surcharges on insurers they see as too big to fail.

Nigel Wilson, chief executive of the leading life assurer, is set to announce in a speech tonight (February 6th) that the proposals fly “in the face of all the evidence” and slam a form of embedded value accounting still used in the insurance sector, the Financial Times reports.

In April, regulators will publish a list of insurance companies they think are too large to go under and these organisations will face targeted capital surcharges and restrictions on lines of business deemed non-insurance or non-traditional, such as derivatives trading and financial guarantees.

Mr Wilson is preparing to say these plans could harm the economy and ask: “How much would be spent on compliance which could otherwise be invested in – for example – addressing the crisis in affordable housing?”

The expert is also expected to raise concerns that national regulators are likely to place similar restrictions on other insurance firms that do not meet the globally systemically important criteria.

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