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BBC Radio 4’s Money Box has been named Financial Programme of the Year at a prestigious ceremony in London.

Money Box Presenter Paul Lewis collected the award at the Association of British Insurers (ABI) event on Wednesday.

Other nominees in the Financial Programme or Broadcaster of the Year category were the BBC’s Andrew Verity and Declan Curry.

The BBC News Website’s Your Money section also triumphed, winning the Best Financial Website category.

The awards are designed to “celebrate excellence in journalism”, and are now in their tenth year.

Money Box was commended by the judges as “tough, enquiring, but fair”.

Lifetime achievement

The ABI is the trade association for Britain’s insurance industry.

Award winners were chosen by the communication and press teams of the ABI’s 400 member companies.

The ABI said the factors taken into account were accuracy, knowledge of issues, ability to inform and educate, and receptiveness to story ideas.

Other winners at the event included the Financial Times which scooped the Personal Finance Newspaper of the Year award.

The Daily Telegraph scored a double success. Ian Cowie was voted Personal Finance Editor of the Year, with Alison Steed named Personal Finance Journalist of the Year.

The Lifetime Achievement in Financial Journalism award went to William Kay, Sunday Times.

The event was hosted by Ian Hislop and attended by 450 representatives from the financial services industry and financial media.

BBC Radio 4’s Money Box is broadcast on Saturdays at 1204 BST and on Mondays at 1502 BST.

Originaly from Source

Shares in Paris-based consultancy Capgemini and Indian software firm Infosys Technologies have jumped on reports of a possible merger.

Infosys declined to comment on “market speculation” that it planned to bid for the European group, bolstering its position in the technology market.

But investors chased the Bangalore firm’s shares up 2.5% in India. Shares in Capgemini rose 4.61% in Europe.

A tie-up would help Infosys prepare for an outsourcing slowdown, analysts said.

Outsourcing slowdown

Infosys has grown exponentially over the past five years, capitalising on the demand for IT outsourcing from India’s large and well-trained English-speaking engineering workforce, whose wages are on average a fifth of those in the West.

Margins are very high in consulting business as compared to other commoditised business Infosys has Tejas Doshi, Sushil Finance

Infosys said its fourth quarter net profits leaped 70% to 11.4bn rupees ($267m; 134m) in the three months to 31 March, from 6.73bn rupees a year earlier.

But it recently said it expected earnings growth for the coming financial year to be more modest amid rising wage pressures and a strengthening rupee, which makes India a less attractive bet for outsourcing.

“Margins are very high in consulting business as compared to other commoditised business Infosys has,” said Tejas Doshi, an analyst with Sushil Finance.

“If the deal with Capgemini actually happens, Infosys will be able to successfully compete with other biggies in the consulting space,” he added.

Indian outsourcing companies have increasing looked to expand their operations overseas, with TCS buying into the UK insurance business, and other firms setting up offshore centres in Eastern Europe.

Capgemini has larger revenues but lower profits than Infosys. For the whole of 2006 it reported net income of 293m euros on income of 7,700m euros.

Originaly from Source

Store cards that charge interest at 25% or more a year will have to warn customers on their statements that they can get cheaper credit elsewhere.

The measure is being imposed by the Competition Commission to help prevent store card holders being overcharged.

The commission found that the annual percentage rates (APRs) on store cards were too high.

As a result it calculated that store card users have been overcharged by at least 55m a year.

“Retailers and store card credit providers are, we have found, effectively insulated from competitive pressures,” said commission deputy chairman Christopher Clarke.

“The consequence is that store cardholders who take up credit and associated insurance pay too much.”

More information

The watchdog’s investigation into store cards was launched in March 2004 at the request of the Office of Fair Trading.

Excess prices paid for credit and insurance on store cards has been at least 55 million a year and possibly significantly more Competition Commission

Last September, the commission, in a preliminary report, said consumers were being overcharged due to inflated interest rates.

It found a lack of competitive pressure on either the annual percentage rates (APRs) charged or the cost of associated insurance.

The commission now says store card credit providers must:

• where APRs are 25% or above, warn cardholders on monthly statements that cheaper credit may be available elsewhere.
  

• give more and better information on all monthly statements.
  

• offer the option to pay by direct debit.
  

• offer payment protection insurance separately from other elements of store card insurance.

The credit card industry, following a parliamentary Treasury Select Committee enquiry into UK debt, agreed to introduce similar warnings on statements in 2004.

The Finance & Leasing Association (FLA), the trade body for the card companies, welcomed most of the commission’s proposals.

But it said it was worried about highlighting charges in excess of 25% a year:

“At first sight, the APR warning notice appears to be an attractive, simple transparency measure. But we are concerned that it may really be a back door cap, harming vulnerable consumers.

“The remedy could harm the most vulnerable consumers, who would be rendered unprofitable to serve by store card providers and whose alternative forms of credit are at higher APRs than on store cards” said the FLA.

Card users overcharged

Although the average APR being charged by store cards has come down slightly in the last year or two, the commission found that the card companies are charging interest at 10-20% above a level that would reflect the costs of providing the cards and generating a reasonable level of profit.

The result is that the average store card APR has been 26.5%.

The Commission estimates that by the end of 2006, 90% of store card accounts will still be charging interest of at least 25% a year.

It also discovered that the APRs charged on many store cards cluster around the 30% level.

By comparison nearly all credit cards - 95% of them - are cheaper, charging interest of 26% or less each year.

This has led to store card users being overcharged by at least 55m a year and “possibly significantly more”, the commission said.

Which? formerly known as the Consumers Association, said people should avoid store cards at all costs and choose a cheap-rate credit card instead:

“Given that the average credit card APR is 15 per cent, all those people with APRs between 15 per cent and 25 per cent are already borrowing at a very expensive rate and will have no warning that they could be borrowing more cheaply” said Which?

The market

The number of store card accounts in use has been declining and had dropped to 11.4 million by the end of 2005.

But with 70 different retailers offering them they are still an important source of credit for shoppers.

The commission does not accuse retailers of conspiring to cheat their customers.

Instead it points the finger at the way the whole market operates.

Among the features it highlights are that:

• store cards are often sold as a way of getting cheap offers on goods rather than on the basis of their APRs.
  

• customers are not sensitive to the APRs or late payment charges on store cards.
  

• customers do not understand the cost of buying insurance policies such as payment protection insurance which is often bundled into the cost of the card.
  

• card statements do not provide enough information about the charges being levied.
  

The commission believes that greater transparency would bring more competitive pressures into the supply of store cards, thus bringing charges down.

Originaly from Source

The students at St Columba’s College in St Albans are taking finance very seriously. They are studying it as part of the Institute for Financial Services curriculum.

All the boys are taking their AS levels and in addition are taking an IFS course (an AS level equivalent qualification). The course looks at the structure of the banking industry and how it came to be that way.

Enterprising

In addition to the theory the students have set up a company called magine which is a Young Enterprise Company. This scheme encourages young people to get together and run their own company.

magine makes cufflinks out of coins and they sell for roughly 4-8 to other boys at the school.

Financial lessons

The boys were amazed to learn in a recent newspaper article that 46% of 16-year-olds didn’t know the difference between credit and debit cards.

So they decided to design and produce their own product to help students understand personal finance better.

The CD-Rom presentation is called “Financial advice for the teen earner” and gives basic tips on just about every aspect of school life:

Belgian legislators are hoping to bring that to a close with a parliamentary bill that would draw prostitutes into the legal fold and bring the industry under state control, providing sex workers with labour rights and greater health protection.

But for a fee.

The sex workers themselves would be expected to pay up when the tax man calls - boosting state coffers to the tune of an estimated 50 million euros a year.

It represents an attractive option for a country currently struggling to balance its budget deficit - a means of generating money while affording prostitutes better protection.

The fact is, sex is a good source of revenue, as the underworld has long known. The industry is incredibly lucrative, given the consistent nature of demand for the services of the world’s oldest profession.

At the moment it looks like all the government cares about is getting their hands on sex workers’ money Marion Detlefs Hydra, Berlin

In Thailand, for example - where both sex workers and some policy advisers have been pushing for legalisation and taxation - the sex industry is thought to account for at least several percent of the nation’s GDP.

In Britain, it is estimated that some 770m ($1.2bn) is spent on prostitution every year, more than on cinemas or many other forms of entertainment.

Those who can tap it, do. The US state of Nevada, where prostitution is legal, hopes to pick up millions of dollars over the next two years from houses of prostitution.

But for most it remains untouchable capital, beyond the reach of politicians needing cash injections for ailing health services, welfare systems and other popular expenditures.

Legalisation is often the only way to tap into this source of wealth while offering prostitutes better working conditions, a route both Germany and the Netherlands have embarked on in recent years.

Prostitutes in Germany, believed to number around 400,000, have for the past year been able to take part in a scheme that offers social benefits like pensions, health insurance and a 40-hour week in sanitary conditions, in exchange for a slice of their earnings.

It’s a slow process, but I do think it’s moving, and that the situation for prostitutes is improving Marieke van Doorninck Institute for Prostitution Issues

For their part, Dutch prostitutes have been asked to pay 19% VAT for similar rights since brothels were legalised nearly three years ago.

Advocates of this kind of legislation believe it is the only way to make sure sex workers enjoy adequate health and employment protection.

Opponents say it simply consolidates them in a position from which governments should be battling to remove them.

Teething problems

Finance ministries in both Germany and the Netherlands say it is impossible to calculate just how many prostitutes have registered to pay tax as forms do not ask them to name their profession.

But anecdotal evidence from prostitutes’ organisations suggests that many have, where possible, at least tried to take up the offer.

“It has, however, been very difficult,” says Marion Detlefs of the Hydra prostitute advice centre in Berlin. “When it was set up there was much talk of securing proper contracts, proper health insurance but a lot of this hasn’t materialised because of big holes in the legislation.

“At the moment it looks like all the government cares about is getting their hands on sex workers’ money - women who are already hard-up are giving their earnings away and getting very little return.”

Despite the problems of these fledgling laws, European groups lobbying for better conditions for prostitutes believe they are at least a step in the right direction.

“But it has to be a matter of mutual benefit,” says Marieke van Doorninck of the Institute for Prostitution Issues. “Governments have to offer real labour rights and protection in exchange.”

“It’s a slow process, but I do think it’s moving, and that the situation for prostitutes is improving. People’s attitudes are also starting to soften.”

Ms van Doorninck says that while money provides one impetus for governments to legalise prostitution, the other issue is bringing the industry under state control to regulate its expansion.

In the Netherlands, legalisation has not led to the expansion of the industry, as predicted by some, but in fact to the closure of a number of brothels which are unable to comply with the restrictions and the bureaucracy involved with gaining legal status.

But under the Dutch law, only Dutch citizens and those from the European Union are allowed to work as prostitutes in brothels, which many believe will have pushed illegal migrant sex workers onto the streets.

While their earnings may be safe from the tax man, neither they nor their cash enjoy much protection from underworld bosses.

Should prostitution be legalised and governments use its revenue? Or should more be done to stamp the profession out?

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Your reaction

Three words described legalized prostitution –”Opening Pandora’s Box”. I’ve got children who could eventually work in brothels and the streets if they cannot meet their financial needs in the future. Nothing can compare to the evil legalised prostitution will bring to your country and to the world at large. God Bless!)
Jozcat, Phils.

It is estimated that two thirds of those working in the brothels in the Netherlands are from outside the EU Anna, UK

We are speaking as those from developed countries where the choice of whether to work in the prostitution trade is often a lot easier. Would any mother or father really want their daughter to work in the trade? What about those forced into the trade and trafficked from the developing world? Women from countries in the EU do not want to work as prostitutes so the women have to be imported from countries where the economic situation is so bad the women have no choice. It is estimated that two thirds of those working in the brothels in the Netherlands are from outside the EU. Once again an example of a developed country exploiting the poverty and desperation of those in the developing world. But hey - Belgium will get richer out of the taxes so let’s concentrate on that!
Anna, UK

Having heard too many horror stories about the conditions of prostitute’s lives, I can’t help feeling that legalization and a strong support structure is vital - but perhaps in combination with a clampdown on illegal prostitution (ie pimps and clients, not persecution of prostitutes). Currently the half-tolerated but illegal position of prostitution benefits nobody except unscrupulous criminals.
Paul, Czech Rep

Prostitution is a fact of life and is a service which if regulated would hurt nobody. At the moment, a blind eye is turned on massage parlours and conditions are poor. Admission of prostitution and incorporation of it into the service sector could improve conditions and free resources to move prostitutes from the streets which is a cause of concern for local communities and in view of the safety aspects of the girls.
Phillip, UK

I went to Amsterdam recently on holiday with friends. To my surprise, the Red Light District is so damn well organised. More importantly, people are friendly (as you’d expect) and they all get on. The place is clean, people dont fight, and the girls are making more money than most people. Fact is, if people are willing to work as Prostitutes, let them but tax them and make it legal in certain places. Keep the area under constant monitoring and let the government make more money!!!!

Fais,
England

Like drugs, gambling and pot noodle, prostitution is something that appeals to human instincts Gavin, Wales

Like drugs, gambling and pot noodle, prostitution is something that appeals to human instincts. It’ll happen regardless of whether it is legal or not. Legalising it should make it safer for all parties and take some of the seediness out of it.
Gavin, Wales

Thou Shalt NOT commit Adultery.
Its SIN to commit Adultery.
God will punish those who commit Adultery and those who legalised Adultery.
Gurkha Rai, Sydney, Australia

Agriculture is the oldest profession, not prostitution!


Alec Weir,
UK

Surely the safety of the girls should be the prevailing factor rather than the cash that could be generated. It is shocking that prostitutes are treated as 2nd class citizens because it upsets the principles of a few middle class bores. Prostitution is not an occupation which is chosen but is thrust upon someone who is vulnerable and has nowhere else to turn. These people need protection from the dangers they are exposed to from their clients and their ‘pimps’. Legalisation can only be a good thing to help get these girls off the streets.
Chris, UK

As long as the woman [or man] voluntarily sells her or himself, then i don’t see why it should prohibited. What one wants to do with one’s own body is not the business of anyone else. However, if it becomes legally permissible, i definitely think that it should be taxed just like any other industry. The same applies to substances such as marijuana - let people decide to abuse their own bodies as they see fit.
Hannah, USA

Yes! Legalise it and collect the revenue. Like the drug issue it will not go away no matter how stigmatised, criminalised or politicised it becomes. Tax an inevitable source of revenue and make conditions safer for all involved.


Nik,
England

They should impose huge fines on prostitutes to stop the crime paying Giles Johnson, UK

Prostitution is a sickness of society, opposes family values, increases abortion and is often the desperate act of drug addicts to obtain cash. It should never be legalised. If the government wants to tap money from this market then they should impose huge fines on prostitutes, to stop the crime paying.
Giles Johnson, UK

Whatever our opinions of the profession, it will not go away. America tried to do away with alcohol during the prohibition period and it proved to be impossible. So if it can’t be stopped governments might as well make the best of it.

John R, UK

Prostitution is exploitation of women by criminals. Their clients are pathetic. Your description of this activity as a “profession” is a disgrace. I recommend you view the film Lilya-4-ever, a look at the day to day realities of prostitutes.
Emmet Fahy, Ireland

Making prostitution legal would benefit the whole community. You will no longer have red light districts on housing estates as areas could be designated by the police. This should help many areas which are affected by the constant cat and mouse game between the police and prostitutes. The health benefits would lead to a decline in the rate of sexual disease, as by having regular testing the disease should be treated much earlier. The prostitutes themselves would be able to work in a much safer environment leading to less assault and a lower crime rate against them.

Guy Willoughby, UK

‘We must take advantage of it and cash in’ James, Canada

Stamping our prostitution is like stamping out sex… will never happen. So governments who realise this say to themselves “If we can’t eliminate it, then we must take advantage of it and cash in.” Money is not the root of all evil… weak men are.


James,
Canada

I am originally from New Zealand and prostitution has finally been decriminalised there recently. Prior to this there was quite a percentage of prostitutes paying tax on their earnings anyway and the government seemed to have no qualms using the revenue. Prostitution should be decriminalised.
Elle, UK

All this amounts to is the governments acting as pimps and providing protection for their ’staff’ in return for a slice of their wages.
Simon, Edinburgh, UK

One of the greatest scandals of our age is trafficking women to be abused as sex objects Anthony, Germany (UK)

Yes it should be legalised, but not with the aim of simply collecting more tax revenue. One of the greatest scandals of our age is the trafficking of women to be abused as sex objects. Anything that can make it tougher for criminals to enforce their brutal exploitation of these helpless victims has to be welcomed.


Anthony,
Germany (UK)

Well, several hundred years of trying to extinguish prostitution didn’t help. I’m strongly in favour of legalisation as it would help in health and social issues. The additional benefit is that legal brothels would help in preventing trafficking as someone with a legal business would be less willing take a risk with illegal activities.
Vladan Konstantinovic, Serbia & Montenegro

Until three years ago prostitution was illegal, but accepted. The police could keep an eye on the situation (investigate criminals that forced young Eastern European girls into prostitution) and local government could develop a policy concerning prostitution (locate it in certain parts of town etc). Now it is legal, the position of legal prostitutes has improved a little. But the illegal prostitutes are much worse off. They are not visible anymore and more easily the victim of criminal groups that are active in prostitution. The aim of the legalisation was to protect prostitutes. In my opinion it has failed.


Nanne de Jong,
Netherlands

Yes it should be legalised. The government could make a huge amount of money from the industry and it would provide safer surroundings for those who work in the industry.
TDD, UK

It will always exist in every society. Therefore, the mature and responsible course of action is to bring it within the government sphere of influence. This will make it safer for both parties involved and allow the government to take a piece of the pie. The taxes could be used for schools and the NHS.


Nick,
UK

Originaly from Source

The Competition Commission has demanded a shake up of the store card industry that will mean big changes for the industry and borrowers.

What has the Competition Commission concluded?

In short, the Commission has found that store card holders are being overcharged by at least 55m a year - and possibly much more - as a result of inflated interest rates.

The store card market was deemed to be uncompetitive with little incentive for providers to reduce annual percentage rates (APRs).

How expensive are store cards?

The Competition Commission says that store cards are between 10% and 20% more expensive than they should be.

It estimates that by the end of 2006, 90% of them will be charging more than 25% a year.

By contrast, 90% of credit cards currently charge 22% or less.

The Finance and Leasing Association (FLA) says that some store cards have been replaced by shop branded credit cards - which can be used at all retailers - with typical APRs well below 30%.

Consumer groups have expressed concern that a large proportion of store card borrowers are on relatively low incomes.

As a result, they argue, the highest rates are paid by the people who can least afford them.

What changes have been proposed?

The main recommendation is that providers who charge more than 25% a year should put big health warnings about their rates on their store card statements saying that cheaper credit is available elsewhere.

All monthly statements should also display more prominent information about the APR, the interest payable next month, the level of fees and charges.

Payment protection insurance policies should also be offered separately.

Previously, an Office of Fair Trading (OFT) investigation into the industry had found that just 23% of people applying for store cards were offered the opportunity to take the application form away with them.

In addition, the OFT found that information on what interest rate was being charged was not available in a third of cases, and 40% of the shoppers thought the information provided was inadequate.

I have a store card. Will I see the rate of interest I pay fall?

In theory yes, if the new proposals actually work.

Just the threat of them has brought down the average store card APR slightly in the last year or so.

The commission is hoping that consumer behaviour will do the trick; by introducing warnings on statements consumers will become increasingly savvy about their choice of card.

Ultimately, the idea is that improved consumer awareness of APRs will mean greater competition in the market and a general lowering of interest rates.

The commission says that its plans should come into effect in early 2007.

Originaly from Source

Financial jargon is preventing many people from saving, research has claimed.

About 21% of people surveyed said they thought they would save more money if financial services companies were clearer in
communicating with them.

The research was carried out for the insurance industry’s Raising Standards Quality Mark Scheme, which aims to replace financial jargon with clear English.

It thinks less jargon would help to reduce Britain’s 27bn savings gap - the deficit between what people actually save and what they need to save for retirement.

Three-quarters of the 2,500 people questioned said they would take more interest in their finances if they understood the information companies sent to them.

Jargon has played a major role in switching people off from money management Martin Shaw Raising Standards

Nearly 40% said they
would take more time to read statements they received.

And 36% of people thought they would be more likely to shop around for a better deal if financial products were easier to understand.

Martin Shaw, director of the Raising Standards Quality Mark Scheme, said:
“Our research shows that this is more than a simple exercise in customer
relations - jargon has played a major role in switching people off from money
management.

“Of course, clear information will not close the savings gap alone, and the
Association of British Insurers is continuing to work with the government and
regulator on improving the incentives to save.

“In the current climate, people need to be able to make informed decisions
and the industry’s Quality Mark helps the public do just that.”

Originaly from Source

The scandal, which involved incentive payments made to consultants, apparently in order to win contracts in Iran, also led to the departure of the former chief executive Olav Fjell.

“I hope, and I also believe, [this scandal] proves to be a fairly unique occurrence, and that it is not a question of a corruption culture,” Mr Lindbaek said in an interview with BBC News Online.

Investigation

Mr Lindbaek has appointed the consultancy firm Ernst & Young to look through all Statoil’s international consultancy agreements.

“I’m not starting from the assumption that there is a need to clean up anything from the past,” Mr Lindbaek said.

“Statoil has very good policies with relation to the question of corruption,” he insisted.

A summary of Ernst & Young’s findings will be made available, but “the report itself will not be published”, Mr Lindbaek said.

Transparency

It is no secret that oil companies regularly pay bonuses to governments and facilitation fees to companies or individuals to secure contracts - in fact, some such payments are perfectly legitimate.

But problems tend to arise when payments are kept secret, or when illegal bribes are paid to officials to speed up or secure deals.

The Organisation for Economic Cooperation and Development (OECD) has said it wants to outlaw such bribes.

And recently Nigeria’s President Olusegun Obasanjo urged oil firms to become more transparent and accountable.

Mr Lindbaek believes the whole oil industry is in the process of cleaning up its act.

“I believe it is perfectly possible to work in developing countries without bribing. That is also Statoil’s policy,” he said.

“We are publishing what we are paying. That principle is quickly gaining ground.”

Indeed, Shell and BP have both signalled a willingness to declare their legal payments.

And the French oil giant Elf - whose former bosses were given prison sentences recently for embezzling money from its facilitation fund - says it no longer pays bribes.

Missing money

Mr Lindbaek has also asked Ernst & Young to investigate one of Statoil’s deals in Nigeria where it has sold a 20% stake in an exploration site to the local oil company Allied Energy for $5m, apparently without ever getting paid.

The stake had been bought in 1993, and in 1997 oil was found.

When Statoil and BP, who owned 20% each, decided it was not commercially viable, they sold their stakes to Allied Energy, the owner of the remaining 60%, for a fraction of what they had paid for it.

Statoil insists the investigation into this affair is not a search for instances of corruption.

Anti-corruption

Mr Lindbaek’s qualifications make him more than suitable for the Statoil chairmanship.

Mr Lindbaek is also searching for a new chief executive for Statoil.

An economist by training, he has held senior positions with the World Bank’s International Finance Corp and with the Nordic Investment Bank.

He was also the chief executive of Norway’s leading insurance company Storebrand for ten years, and he is the former chairman of the former Norwegian oil company Saga Petroleum.

But it is his role as the head of the Norwegian division of the anti corruption organisation Transparency International that should give him the greatest leverage as he gets on with the task of patching up Statoil’s tattered image.

“I believe I was chosen on the basis of my qualifications as a business leader, but I also believe that my involvement with Transparency International was a welcome plus,” Mr Lindbaek said.

New chief

Beyond his tough stance on corruption, Mr Lindbaek is also searching for a new chief executive for Statoil.

The current caretaker chief, Inge Hansen, is in the running, but other candidates will also be considered, Mr Lindbaek said.

Statoil’s next chief executive is probably going to be a Norwegian speaker with extensive industry experience and proven leadership skills.

Following Mr Lindbaek’s appointment, Norwegian energy minister Einar Steensnaes expressed a desire for a female chief executive, in line with the country’s push for greater female representation in the world of business.

Mr Lindbaek said he would make sure there were women on the final shortlist, but in the end the choice would not be made on the basis of the candidates’ gender.

Copenhagen-based headhunting firm Egon Zehnder will help Statoil identify likely candidates.

Originaly from Source

Some insurers and financial advisers are failing to treat their investors fairly, according to the City watchdog.

The Financial Services Authority (FSA) said insufficient advice and “variable quality” after-sales service was being given to with-profit policyholders.

In particular, the FSA was worried that after-sales literature was jargon-heavy and missed out key information.

The FSA warned insurers and financial advisers to up their game or face enforcement action.

Poor after-sales information for these and other policy types makes it harder for consumers to understand the performance of their policies Sarah Wilson, FSA

With-profits are one of the most widely held of investment types.

There are some 32 million with-profits policies currently in force.

With-profit funds invest in the stock market but smooth out investment returns by holding back money made in good years to pay out in bad ones.

Literature letdown

Crucially, the FSA found that many policyholders no longer had access to the adviser who sold them the policy in the first place.

As a result, they have to rely on post-sales literature from the insurer.

Often this literature is not up to scratch, the FSA said.

“Poor after-sales information for these and other policy types makes it harder for consumers to understand the performance of their policies and the product features they have paid for,” Sarah Wilson, director and insurance sector leader at the FSA, said.

“Senior management in both insurers and advisory firms need to re-examine their existing approach and, where necessary, implement changes,” she added.

Originaly from Source

One of South Korea’s richest businessmen, Kim Seung-youn, has been jailed for 18 months for abducting and assaulting workers in a karaoke bar.

Kim, 55, chairman of the Hanwha Group, was convicted of attacking the men with the aid of his bodyguards, to punish them for scuffling with his son.

He admitted responsibility for much of the violence, but said his bodyguards took over when he “got tired”.

The case has generated intense public interest in South Korea.

Heads of family-controlled business conglomerates like Hanwha - which has interests in petrochemicals, finance, insurance, construction and retail - wield huge power.

Courts have often been lenient with these business leaders, but correspondents say the ruling in Kim’s case shows that the judiciary is becoming more even-handed when sentencing the rich and powerful.

Serious injury

Passing sentence at Seoul District Court, the judge, Kim Chul-hwan, said Kim Seung-youn had used his position to take revenge on the workers, carrying out the attacks in a “systematic manner”.

“The violation of the law is big and is serious,” said the judge.

During the trial, prosecutors told the court that this was a revenge attack after an incident involving the defendant’s son, Kim Dong-won, a Yale University student.

Kim Dong-won, 22, was reported to have needed stitches for an eye injury sustained in a brawl with bar workers at the Seoul club.

Kim Seung-youn was said to have mobilised his bodyguards and local gangsters to take the off-duty bar workers to a mountainside construction site, where the revenge beating occurred.

The judge found the tycoon guilty of “beating the defenceless victims with a metal pipe, and threatening them with a stun gun,” although none of the workers sustained serious injuries.

The court ruled that a jail sentence was inevitable.

Before being taken into custody, Kim Seung-Youn apologised, saying that he had lost his temper and hoped that foolish fathers like himself would think twice before following his actions.

Heavier penalties

Traditionally, senior Korean business leaders have enjoyed favourable treatment by the courts in consideration of their contributions to building the country’s economy.

More recently, however, the courts have started to hand down heavier sentences on the business elite.

In February Chung Mong-koo, the chairman of Hyundai motors, was sentenced to three years in jail for breach of trust and embezzling company funds.

Mr Chung appealed earlier this year and prosecutors reacted by asking for his sentence to be increased to six years.

Originaly from Source