Insurers hit back at 'doom-laden' MPs

Insurers have hit back at a group of MPs for their "doom-laden criticisms" of the industry in a recent report on endowment mortgages.

Earlier this month the Treasury select committee issued a damning review saying eight out of 10 endowment mortgage customers will be left with policies that do not cover the debt.

Mary Francis, director general of the Association of British Insurers, yesterday defended the industry and pleaded for "constructive discussion, not destructive criticism and recrimination".

She told an Institute for Economic Affairs conference on life assurance that the industry was working hard to treat customers fairly and give value for money while the industry's regulation and legislative basis were being reformed.

"Though you would not have guessed that from the recent report of the Treasury select committee," Ms Francis added.

"[The report] went beyond some fair and specific proposals for improving communications with customers on endowment mortgages, to sweeping and doom-laden criticisms of the savings industry as a whole."

She said the committee should ask "serious questions" about the value of the work of the Financial Services Authority and the Treasury in investigating these areas.

Ms Francis also warned about the consequences if customers were put off investing in shares. She said that Britons have 50% more wealth than Germans, not including any gains from property, because they invested in equities.

Callum McCarthy, chairman of the FSA, yesterday attacked "unfounded" accusations about the regulator's new, "realistic" way of measuring insurers' balance sheets. He rubbished claims the FSA is destroying the with-profits sector and mutual life insurers in a speech to the Insurance Institute of London yesterday.