FSA has censured a firm in voluntary liquidation for failings in selling and promoting geared traded endowment policies. Integrity Financial Solutions provided and advised on the policies. FSA found the product information it produced was misleading, which may have led IFAs to advise customers to buy an unsuitable product. It also found the firm’s own sales arm did not record information on customers and could not evidence why the product was suitable. FSA would have recommended a £350,000 fine if the firm were not in liquidation.

Justice has to be seen to be done. Without clear reasons from the court as to the decision it reached, a party is entitled to have reheard issues it raised on an earlier application but which there is no evidence the court considered.

The UK Government has announced a consultation on proposals to strengthen the administration regime for insurers, in particular to improve the protection and payment of benefits for persons insured with companies facing financial difficulties and addressing gaps in the administration regime for insurers as compared with the liquidation regime. The proposals include:

1. applying to administration the existing rules for valuing insurance contracts in liquidation; and

2. revising the objectives of administration in insurance company cases by:

Pre-packs continue to occupy centre stage, and administrators might be forgiven for feeling somewhat under the spotlight.

On 31 March 2010, the UK Insolvency Service released a new consultation paper entitled "improving the transparency of, and confidence in, pre-packaged sales in administrations.

FMLC has responded on aspects of Treasury’s consultations on resolution of investment banks. The paper’s main recommendations include:

In the present fi nancial climate, customers are increasingly asking for business critical software or other assets to be transferred to the customer should the supplier become insolvent, for the legitimate reason that the customer needs security of supply. Two recent Court of Appeal cases remind us that customers who outsource to and contract with potentially vulnerable service providers need to take account of the “anti-deprivation principle” when doing this.

On 6 April 2010 a second wave of major changes to the UK Insolvency Rules 1986 (the Rules) came into force.

The Government has announced that it will shortly begin a consultation on important new measures designed to boost confidence in the ‘pre-pack’ administration procedure.

On 12 March 2010, the FSA published the statement that it had provided to the court appointed examiner of Lehman Brothers Holding Inc, which is referred to in his wider report on the collapse of Lehman Brothers.

View FSA statement to the US bankruptcy court examiner on the collapse of Lehman Brothers Holdings Inc, 12 March 2010