Sector movers: Insurance stocks whacked by FCA investigation

28th Mar 2014 14:42

Insurance stocks were reeling on Friday ahead of a Financial Conduct Authority (FCA) investigation into billions of pounds worth of policies dating back four decades on concerns that customers were being exploited.The FCA, which will formally announce the probe on Monday, is focusing on products that are no longer open to new business, known as 'closed' or 'zombie' funds. Resolution fell as much as 15% early on, while Phoenix dropped as much as 23% after The Telegraph reported that the regulator would check 30m insurance policies sold between the 1970s and 2000.However, losses were trimmed by the afternoon after the FCA released a statement, assuring companies that it would not look to apply current standards retrospectively, for example on exit charges.The FCA said: "We are not planning to individually review 30m policies, nor do we intend to look at removing exit fees from those policies providing they were compliant at the time."[...] We want to examine areas that are of interest and relevance to consumers and to firms and assess whether there is an issue that requires any action. No conclusions have been reached as work has not started."Insurance stocks recovered slightly after the comments but were still suffering steep falls, including Aviva, Legal & General, Prudential, Standard Life and Admiral.Sentiment in the sector was already very fragile following last week's 2014 Budget by Chancellor George Osborne in which he unveiled a big shake-up of the annuities market.Top performing sectors so far todayHealth Care Equipment & Services 5,256.07 +2.44%Mining 16,692.73 +1.69%Industrial Metals & Mining 987.73 +1.55%Electricity 9,878.27 +1.46%Automobiles & Parts 9,204.97 +1.29%Bottom performing sectors so far todayLife Insurance 6,616.29 -5.31%Fixed Line Telecommunications 4,362.08 -1.39%Industrial Transportation 3,289.17 -0.63%Insurance (non-life) 1,855.39 -0.56%General Retailers 2,953.43 -0.55%BC