§ 33. Mr. DenhamTo ask the President of the Board of Trade what estimate he has made of the level of provisions required by insurance companies to meet the compensation arising from the mis-selling of personal pensions; and if he will make a statement.
§ Mr. Neil HamiltonThe Department has written to life offices asking for an indication of their likely exposure to compensation in respect of mis-selling of personal pensions, and providing guidance on how the Department expects them to reserve for any such exposure in future Companies Act accounts and DTI returns. Individual responses must remain confidential as between the life offices and the Department, but where a life office considers that it is likely to have a liability, or a contingent liability, in respect of mis-selling of pension business, the Department expects this to be recognised in the published accounts. The Securities and Investments Board is seeking to determine the extent of mis-selling and the position will not be clear until that review is completed later in the year. It would be wrong to conclude, therefore, at this stage that evidence of procedural defects necessarily implies that the advice given by financial advisers was bad.