FSA under pressure on inherited estates

Law firm Herbert Smith says the Financial Services Authority (FSA) is under pressure from both consumers and the Treasury Committee to justify its position on inherited estates, but how far will it go?

In the context of a proposed reattribution, arguments about “ownership” of inherited estates are often expressed in terms of a simple choice between giving the cash to shareholders (bad) and giving it to policyholders (good). In reality, the issues are far more complex. Insurers should resist attempts by the FSA to change its rules in ways that fail to recognise such complexity. To do otherwise may put the ongoing viability of with-profits businesses at risk and would clearly test the FSA’s credibility, given its extensive reform of with-profits regulation in recent years.