The Financial Conduct Authority chief executive Martin Wheatley is to step down in September, the City watchdog announced today.
Wheatley will continue to act as an adviser to the FCA board until January 2016.
The current FCA director of supervision Tracey McDermott will step up to become acting chief executive from 12 September while the FCA searches for Wheatley’s replacement.
John Griffith-Jones, chairman of the FCA, said "Martin has done an outstanding job as chief executive, setting up and leading the FCA over the last four years."
Billions of pounds were wiped off the value of leading insurance companies today after the City watchdog launched a new investigation.
The Financial Conduct Authority is looking at policies like endowments and pensions dating from the 1970s to the turn of the century that locked savers in with high exit fees, amid concerns customers may have been charged too much.
ITV News Economics Editor Richard Edgar reports.
Britain's largest insurer says it expects to feel "minimal" impact on profits as a result of an investigation into 30 million policies.
Aviva, which has seen its shares close almost 3% lower after the announcement of the probe, says it has already capped charges at 1% or less for pre-2001 group personal pension policies and has no material exit charges applying to its legacy book.
It said the Financial Conduct Authority's review could apply to around £200 million of its long-standing life insurance policies.
However, the firm added its "treatment of customers has been fair and appropriate, and therefore any impact on the group's profits should be minimal, if at all".
Ongoing exposure of poor practice in the financial services industry has "shattered" the public's trust, an expert has said.
Ros Altmann, an independent pensions expert and savers' campaigner, said: "Too often, insurers rely on customer inertia and take advantage of people's trust.
"Insurance is meant to offer both protection and future growth at a reasonable price, yet all too often its product pricing relies on customer inertia to recoup costs from captive customers."
Shares in a number of insurance firms have recovered slightly since tumbling this morning in the wake of the Financial Conduct Authority's announcement of an investigation into 30 million policies.
Performance since the start of the day for a handful of companies is as follows:
- Resolution was down 7.10%
- Standard Life was down 1.55%
- Aviva was down 2.75%
- Legal & General was down 3.67%
- Prudential was down 3.03%
Insurer Legal & General called on the Financial Conduct Authority to bring forward details of its investigation into 30 million polices sold between the 1970s and 2000 after a "disorderly market" reaction to the announcement.
Legal & General does not outsource customer administration: our customers benefit from the continuity of a single product and service provider.
Our operating practices ensure we provide good value to our customers, and we have operated a programme of ongoing product reviews for more than 10 years.
The City watchdog the Financial Conduct Authority has told ITV News' Business Editor Joel Hills about their inquiry into 30 million policies sold by insurance companies between the 1970s and 2000:
FCA tells me "highly unlikely" exit fees will be wiped out. It's assessing the "fairness" of the 30m policies today not if were missold.
Shares in insurance companies have tumbled this morning in the wake of the Financial Conduct Authority planning an investigation into 30 million policies sold between the 1970s and 2000.
- Resolution was down 11.1%
- Standard Life down by 2.6%
- Aviva was down 4.3%
- Legal & General down by 5%
- Prudential down by 3.5%
The inquiry comes amid concerns that loyal policyholders are not being given the same priority as new customers.
The Financial Conduct Authority (FCA) is planning an investigation into 30 million policies sold by insurance companies between the 1970s and 2000.
The inquiry comes amid concern that loyal policyholders are not being given the same priority as new customers and are facing high fees for substandard service. It will include pensions, endowments, investment bonds and life insurance.
The FCA review, which is to begin this summer, is concerned about insurers using returns from so-called "zombie" funds - which are closed to new customers - to pay bills from other parts of their businesses.
A large number of policies also include exit fees that can halve a policy's value if a customer attempts to switch to a cheaper provider.
Clive Adamson, the director of supervision at the FCA, told The Daily Telegraph: "As firms cut prices and create new products, there is a danger that customers with older contracts are forgotten. We want to ensure they get a fair deal."
The FCA's report into the annuity market will be published within the next 12 months, and may include rule changes and new regulations.
Ros Altmann, an independent expert and former Downing Street adviser, said more action should be taken now to halt the "scandal" that is depriving many of a fair income in their retirement.
The reason why immediate action is so important is that this market affects so many people and the transactions they are making are irreversible.
More than 1,000 people every week are buying annuities and the market is worth £14 billion each year.