FSA consultation - mis-selling compensation being paid from with-profits funds

I don't quite know where to post this, hear seems to be the best place -

The Financial Services Authority (FSA) is seeking to stop companies paying mis-selling compensation out of customers with-profits funds inherited estates (the money used for smoothing returns etc).

This is a laughably slow reaction to the problem, coming as it does after the majority of the pensions and endowment compensation claims have already been paid out and the firms concerned have effectively got away with it. There is no retrospective element.

Press release -

The Financial Services Authority (FSA) has today published a consultation paper (CP) which proposes that insurance companies will no longer be permitted to charge compensation for mis-selling to the inherited estates of with-profits funds. The proposals relate specifically to proprietary firms and not mutuals.

http://www.fsa.gov.uk/pages/Library/Communication/PR/2008/051.shtml

Short, readable consultation paper -

http://www.fsa.gov.uk/pages/Library/Policy/CP/2008/08_11.shtml

Online response form -

http://www.fsa.gov.uk/pages/Library/Policy/CP/2008/cp08_11_response.s...

To which I've replied -

Q1 Do you agree with our proposal to prevent the use of inherited
estates to pay compensation and redress?

Yes.

Q2 Do you agree with our detailed proposals?

No. Because the FSA has acted far too slowly, as evidenced by the
statement detailing the expected financial impact in section 10 -

"the bulk of compensation for pension mis-selling has now been paid."

and

"in relative terms the outstanding bill for with-profits funds is not
estimated to be very large."

all previous compensation payments for mis-selling from the inherited
estates need to be refunded from shareholders funds.