§ Mr. RadiceTo ask the President of the Board of Trade if she will make a statement about the future regulation of the insurance industry. [10589]
§ Mrs. BeckettThe insurance industry is a key—and highly successful—part of the United Kingdom's financial services sector. In 1995, it earned worldwide premium income of some £92 billion—equivalent to 14.3 per cent. of gross domestic product—and invisible earnings of £5.4 billion.
It has long been an anomaly that, alone among financial services, prudential supervision of the insurance industry, has been carried out by the ministerial Government Department rather than an arm's-length body. The announcement by my right hon. Friend the Chancellor of the Exchequer that the Government will be bringing forward legislation to create a new enlarged financial services regulatory body is an opportunity to put this right. I have therefore agreed with my right hon. Friend that, when the new unified regulatory body has been established, it should assume responsibility for the insurance supervisory functions presently carried out by my Department. The Prime Minister has agreed that the Treasury will assume ministerial responsibility for insurance matters and a transfer of functions order will be brought forward as soon as possible.