Bluefin boss attacks Tory threat to FSA

THE HEAD of one of the UK&rsquo;s largest insurance brokers has hit out at shadow chancellor George Osborne&rsquo;s plans to scrap the tripartite system of regulation, accusing him of &ldquo;pandering to public sentiment&rdquo;. <br /><br />Howard Fryer, managing director of Axa-owned broking giant Bluefin, has said the insurance sector would face costly turmoil if Osborne goes ahead with his pledge to scrap City watchdog the Financial Services Authority (FSA).<br /><br />&ldquo;The industry would have to start all over again and it would mean more costs for the end-consumer,&rdquo; he told City A.M.. &ldquo;Has anybody actually thought this through?&rdquo;<br /><br />Fryer&rsquo;s remarks underscore mounting concern in some areas of the financial services industry that Osborne&rsquo;s FSA plans will lead to regulatory chaos. <br /><br />Osborne has promised to scrap the FSA in the likely event of the Tories winning a 2010 general election, and hand its powers to the Bank of England and various other bodies. <br /><br />Fryer said insurance has already completed massive reforms since coming under FSA control. <br /><br />And he said that if the FSA&rsquo;s powers are divided up, it will mean a regulatory change on a scale will inevitably lead to a great deal of paperwork, training and consumer education. <br /><br />&ldquo;Who knows &ndash; it might be that somebody is clever and says, &lsquo;Ok we can achieve this seamlessly, we will just change the names and addresses&rsquo;. Somehow I doubt it,&rdquo; he said.<br /><br />He added non-life insurance brokers have just got through a massive period of turmoil after FSA regulatory control began in 2005. &ldquo;We would be back to square one again,&rdquo; he said. &ldquo;We have only just started a find a rhythm, but now we find ourselves caught in the same trap again.&rdquo;