Standard Life, the last of the large mutual life and pensions offices in the UK whose fund management arm recently outsourced its fund administration needs to Citigroup, is finding it difficult to convince the Financial Services Authority (FSA) hat it can meet the solvency tests set by the regulator.
Standard Life, which has maintained an ostentatious commitment to mutual ownership despite the near-fatal troubles mutuality causes its coeval Equitable Life, is reported in the Financial Times today to be struggling to persuade the FSA that its over-exposure to equity markets in recent years has not sapped its financial strength to the point of danger.
The mutual has 2.3 million policyholders, many of them armed with guaranteed returns of the kind that sank Equitable Life. Life assurance companies that the FSA deems to be insolvent are not permitted to continue trading.