Finance and Insurance Market: Underwriting Fees

Lord Harrison Excerpts

Wednesday 12th January 2011 Lords Chamber

Asked By

[Lord Harrison]

To ask Her Majesty’s Government what assessment they have made of the level of underwriting fees in the United Kingdom finance and insurance market.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, the Office of Fair Trading is currently undertaking analysis of the way the underwriting market works and assessing whether there is potential for improving the way it functions. The report will consider how underwriting services are purchased, how underwriting services are provided and how the regulatory environment affects the provision of these services. The report is intended to be published later this month. The Government await with interest the findings of the report.

[Lord Harrison]

My Lords, given that City underwriters have in recent years pocketed some £2.5 billion through raised insurance claims without paying out once, not even on the capital-raising bids from RBS and Bradford & Bingley, does the Minister accept that those who lose out are the British shareholder, investor, saver and taxpayer? In light of this, will HMG undertake to implement in full Douglas Ferrans’s report on this subject to increase confidence in the industry, transparency and competition, and bring greater and strengthened rights to shareholders?