HC Deb 04 December 2001 vol 376 cc201-2W
Mr. Gardiner

To ask the Chancellor of the Exchequer what action he proposes the FSA should take to prevent company executives failing to inform(a) their own auditors and (b) the FSA of major solvency decisions. [19634]

Ruth Kelly

From 1 December 2001, under FSMA rules, authorised firms are required to co-operate with their auditors (and appointed actuary) in the discharge of their duties.

Under FSMA, firms are required to report regularly to the FSA on their financial condition and their compliance with regulatory requirements including the requirement to maintain a solvency margin and to maintain adequate assets.

In addition, firms are required to deal with the regulator in an open and co-operative way and to tell the FSA anything of which the FSA would reasonably expect notice. Breach of these requirements may give rise to sanctions, including fines.

The chief executive (and other senior executives) of a firm must be an Approved Person under FSMA. Approved individuals may be liable to sanctions, including fines, if they are guilty of misconduct under FSMA which includes being knowingly concerned in a rule breach. Further protection against improper failure to disclose is available by virtue of the whistleblowing provisions of the Public Interest Disclosure Act 1998.

Mr. Gardiner

To ask the Chancellor of the Exchequer (1) what FSA regulations apply to the activities of Irish European Reinsurance Company when reinsuring UK companies; [19632]

(2) what responsibilities non-UK EU reinsurance companies have to inform the FSA of major changes in the solvency of UK companies. [19640]

Ruth Kelly

None. The FSA does not have any power to make rules governing the behaviour of companies which do not carry on business in the UK.

Mr. Gardiner

To ask the Chancellor of the Exchequer how regularly the FSA communicates with its Irish counterpart; and by what means. [19631]

Ruth Kelly

There is a wide variety of communications, on both a regular and ad hoc basis, between the FSA and its Irish counterpart. The precise form and frequency of that communication is a matter for the FSA.

Mr. Gardiner

To ask the Chancellor of the Exchequer (1) what discussions the FSA has had with its Irish counterparts about Irish European Reinsurance Company's(a) activities and (b) reinsurance of Independent Insurance; [19639]

(2) if the FSA conducted an investigation into all reinsurance contracts held with UK companies by the Irish European Reinsurance Company following the disclosure of its reinsurance of Independent Insurance; [19637]

(3) what action the FSA took when it was informed of Irish European Reinsurance Company's involvement in reinsuring Independent Insurance. [19638]

Ruth Kelly

The FSA' s dealings in respect of individual firms, and the details of its contacts with overseas regulators, are kept confidential between the parties concerned.