-----Original Message----- From: fsarulesok [mailto:fsarulesokaol.com] Sent: 16 September 2005 10:48 To: IFA Defence Union Subject: [IFADU List] Defect in Design - Item 4

Evan

- in the article listed at the foot of this e-mail - I use the analogy of a "jigsaw" - the need to inspect each individual piece to establish where it fits, and it is when they are fitted together that you can see the final picture.

In more ways than one, I am following the same analogy in these e-mails to your members, I am attempting to build a picture piece by piece.

It is not easy to do, and it may be equally hard to follow - but it is the only way I know of in order to deal with this level of complexity - break it down into smaller pieces - and then join them back together

The first piece was a prediction of disaster for IFA's, honest people driven out of business through rules and regulations containing "defects in design"

the second a disaster for with profits, policyholders suffering through rules and regulations containing "defects in design"

the third a disaster based on a "projection rates" regime - and yes you all got it in one - it contained "defects in design"

I am also now attempting to demonstrate that there is a "pattern" to these events, and that what goes around comes around.

Derek knew this when he asked "when's the next ROLAC" - 100% accurate Derek - and it is already on the drawing board. Read on ......

In an earlier e-mail I mentioned the FSA project linked to "generic advice"

- I said it was the FSA's attempt to divide two issues, the giving of advice -v- the giving of advice on a product.

They are recognising something I first wrote about 10 years ago, and understood long before that, and there is a "pattern" to such events.

As the last plan inevitably fails, a new plan must be found ........... but if the reasons for failure of all the previous plans are not understood, or worst still denied, failure is repeated. That's where John McFall is with his new Group - new plans - old mistakes not understood, all of them hidden under the carpet.

I want to illustrate that "theme" in this e-mail, the "pattern" that can be seen. Derek - you gave me the perfect question!

Immediately, the FSA start looking at their rules and regulations - as it may affect "generic advice" - and in particular where that may be advice "divorced" from a product, one would expect any/and all "product providers" to sit up and take notice.

This is the latest ABI press notice - dated only about a week ago :

http://www.abi.org.uk/Newsreleases/viewNewsRelease.asp?nrid=11972

Have we been here before - do patterns repeat?

The last item I issued to your members was a copy of a letter where the OFT acknowledged that the Restrictive Trade Practices Act - a law enacted by Parliament to outlaw Restrictive Practices - "exempted" Insurers from its provisions.

Not "above the law" - "exempt".

Parliament passed into law the Financial Services and Markets Act

- and within the passing of that Act

- it "exempted" the FSA from any legal action for negligence, and also exempted the FSA from scrutiny by the Parliamentary Ombudsman.

Was the granting of such "exemptions" - wise, foolproof or foolhardy?

Was it a "defect in design" with clear evidence emerging of just how disastrous it may prove to be?

Regulators can go 50/50, phone a friend - but as Evan correctly pointed out - nobody ever asks the audience - that is the main "defect in design".

Let's go back to the ABI - but not a week ago - let's go back about 20 years.

Let's see if what goes around, comes around.

Your members have the one copy of a letter to me from the OFT in my last e-mail -basically (altho' it is more complex as the article below shows) the OFT are to ensure there are no Restrictive Practices.

But here is the the "critical "design flaw" -

- the right to provide an "exemption" to the Restrictive Practices Act - was incorporated into the Act by Parliament - which is as it should be

- but the decision on who should or should not be given "exemption" was conferred on the Director General of Fair Trading.

Have any of your members ever "voted" for him? Has anyone- ever?

Was the OFT letter - evidence of what Parliament intended - or evidence of precisley what Parliament intended to outlaw - the OFT have been given the "power" to exempt certain practices - what are the consequences - if they get that wrong?

Could it actually be that it meant that the Restrictive Practices Act became the ultimate Restrictive Practice - it could NOT possibly be, I hear you say ....that would be absolute madness

......read the item below, and as you do so remember it is a piece in a much larger "jigsaw" - and it plays its part in a much larger pattern

http://www.probonopublico.co.uk/downloads/Et_Tu_Sir_Gordon.pdf

Mike Fenwick ...

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