Standard boss faces survival battle

IAIN Lumsden, the £620,000-a-year boss of Standard Life, faces calls to resign over the way the mutual has handled its damaging disagreement with the Financial Services Authority.

The dispute over new rules being used to gauge financial strength erupted last week as the City watchdog admitted 'high-level engagement' with the insurer.

It sparked panic among Standard policyholders, prompted advisers to stop recommending policies - and has left the brand in tatters, say analysts.

'The last three days have been a mammoth cost,' said independent analyst Ned Cazalet. 'Standard's name has been destroyed.'

The Investors' Association, a lobby group to increase the accountability of investment companies to their customers, will now campaign for Lumsden to go.

Spokesman Tim Askew said: ' Standard knew that these rules were coming and should have prepared. Instead, it has been shambolic and the value of the company, which belongs to policyholders, has been badly hit.'

There is also fresh criticism of the non-executive directors. Independent actuary and policyholder Ronnie Sloan, who has campaigned for greater accountability of Standard's board, said: 'Not one of the non-executive directors is an actuary. The bottom line is that the board is unaccountable.'

Cazalet said: 'Standard Life has long disputed my analysis of its financial position. Now it's having a similar argument with the FSA. The executives seem to think they can defy gravity.'

None of the Standard Life's directors was prepared to comment. Nor has the Edinburgh-based insurer issued a statement to reassure its policyholders.

A spokesman said: 'We are not in financial difficulty. This is not about financial strength. This is about discussions with the FSA which all insurers are having.'

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