§ Mr. John TaylorTo ask the Chancellor of the Exchequer who has assumed the(a) responsibilities and (b) potential liabilities of the regulatory bodies previously charged with regulating the affairs of the Equitable Life Assurance Society. [93256]
§ Ruth KellyThe Treasury was responsible for the prudential supervision of insurers between 5 January 1998 (prior to this responsibility rested with the Department of Trade and Industry) and 30 November 2001. Between 5 January 1998 and 31 December 1998 the Treasury undertook this task directly. From 1 January 1999 the Treasury contracted out most of its functions relating to prudential insurance supervision to the FSA. The FSA became responsible for prudential insurance supervision in its own right from midnight on 30 November 2001 when the Financial Services and Markets Act 2000 (FSMA) came into force.
Under the provisions of Part II of the Deregulation and Contracting Out Act 1994, the Treasury remains responsible for the actions carried out by the FSA on behalf of the Treasury during the period of contracting out. Under the Transfer of Functions (Insurance) Order 1997 (S11997/2781) the Treasury became responsible for all the liabilities of the Secretary of State for Trade and Industry in connection with the functions which were transferred to the Treasury.
Under the Financial Services Act 1986, conduct of business regulation was the responsibility of the Personal Investment Authority (PIA), a self-regulating organisation recognised by the FSA. Between 1 June 1998 and 30 November 2001, FSA staff carried out work on behalf of the PIA Board, under contract, in preparation for the implementation of FSMA when conduct of business regulation also became the responsibility of the FSA.
Under transitional provisions made under FSMA, the FSA assumed the liabilities of the PIA and other Self Regulatory Organisations when the Act came into force.