FCA investigates itself

The Financial Conduct Authority says there will be an investigation into the way details of its inquiry into life insurance schemes were made public.

Shares in some of Britain's biggest financial institutions fell sharply in the wake of the announcement that it would look at whether some policies set up between the nineteen seventies and 2000 still represented good value for money.

This stockmarket episode started out with major criticism of insurance companies' charges for old pension and endowment policies and news that the Financial Conduct Authority would launch an inquiry.  It ended with a major embarrassment for the City watchdog itself -- with the authority being forced to launch an investigation into the way it had handled the announcement.

The authority had briefed the Daily Telegraph -- the resulting story suggested there would be action to give millions of savers a better deal, so share prices in insurers plummeted, some down 16 per cent at one point.

Furious insurance industry chiefs complained that a disorderly market had been created -- the Authority then published a statement saying talk about cutting the charges was overblown.

The investigation into the way the matter has been handled will in part be carried out by an external law firm.  It's the first  major setback for the authority since it started work last spring.