Sign in Subscribe
Insurance industry

Standard Life Suspends Trading in Subordinated Debt Amid Regulatory Scrutiny

Strategic Insights

— 1 min read

Standard Life Assurance Co., the UK-based mutual insurance company, has suspended trading in its subordinated debt after discovering "some unusual trading" in the instruments. The company, which is facing scrutiny from regulators, has suspended trading in its subordinated debt at the request of the UK Listing Authority and with the concurrence of the Financial Services Authority. Standard Life acted to avoid any possibility of a false market in its bonds, stating that it will announce its financial strength following talks with the FSA.

Key Takeaways:

  • Standard Life suspended trading in its subordinated debt due to "some unusual trading" in the instruments.
  • The company requested the UK Listing Authority to take the action, with the concurrence of the Financial Services Authority.
  • Standard Life acted to avoid a false market in its bonds, stating that it will announce its financial strength following talks with the FSA.
  • The company denied being in financial trouble, stating that it remains confident in its ability to report a sound relative and absolute capital position.
  • Standard Life and the FSA have been in talks regarding the company's capital strength, with new reporting rules being introduced to ensure that with-profits insurers' reserves reflect their actual market strength.
  • David Stonebanks, a Standard Life policyholder, has been gathering signatures in hopes of forcing the company to hold a policyholder vote on demutualization.
  • Press reports suggested that Standard Life's use of UBS investment bank indicated a possible demutualization, but Nicola Burton, a Standard Life spokeswoman, declined to comment.

Statistics:

  • The suspension of trading in subordinated debt will remain in effect until Standard Life makes an announcement on its financial strength following talks with the FSA.
  • Standard Life plans to announce its annual results on February 18.
  • The next round of bonuses to policyholders will be disclosed on February 1.

Sources:

  • A.M. Best
  • COMTEX
  • Robert O'Connor, Copyright (C) 2004 by A.M. Best Company, Inc.
  • News Provided by COMTEX (http://www.comtexnews.com)

Read more