Lovely article “Baroness Bowles questions UKEB over “true and fair” assessment” by Cintia Cheong in today’s Guy Fawkes special edition of Insurance ERM. In essence, the good baroness accuses the UK’s accounting standard Endorsement Board (UKEB) of dodgy dealing.
To quote her article:
The credibility of the UK’s accounting standard Endorsement Board (UKEB) has been challenged once again [by] Sharon Bowles, a Liberal Democrat peer in the House of Lords.
Earlier this year, Baroness Bowles argued UKEB members “must be nobbled by industry” if they approved the IFRS 17 insurance contract accounting guidelines – the first international financial reporting standard (IFRS) to be examined by the UKEB since it was formed last year.
Her concerns extended to whether the UKEB members would mount any challenge to the IFRS view of what constitutes “true and fair” accounting. Last month, she tabled four questions to the government over the UKEB’s procurement of legal advice on the true-and-fair question.
Bowles said there is a conflict between a true-and-fair assessment under the Companies Act and that under IFRS, “which often is far from true and fair”. She added the UKEB “is not necessarily full of the people who would challenge any of the IFRS-type view of true and fair.”
In her questions to government, she asked whether the UKEB had sought legal advice from Martin Moore QC, whether directly or indirectly through Michael Todd QC, who is from the same chamber as Moore.
In 2013, Moore provided an opinion on true and fair to the Financial Reporting Council (FRC), the body which oversees the UKEB and previously dealt with endorsement issues.
However, the questions Moore was asked to address were not made public. Bowles requested to see the instructions to counsel but was told they were confidential.
She told InsuranceERM: “If you haven’t seen the instructions, you don’t know what the basis of the opinion really is.”
Bowles added the UKEB conceded there was a conflict of interest, given Moore had already given opinions. But she questioned whether the UKEB should hire a QC from the same chambers.
She said: “How can you rule somebody out, because they’re conflicted, and then hold them back in as an advisor with all that history behind? Of course he’s going to say it’s true and fair because that’s the line he took before… It’s dodgy dealing in my book.”
As it happens, Mr. Moore QC and Eumaeus will both be involved in next week’s High Court case – albeit not on the same side – in which the High Court will rule on whether Pru policyholders will be sold down the river have their policies involuntarily transferred to Rothesay Life.
As the eminent QC’s resume on Erskine Chambers states, “Martin is considered the go-to Silk for Part VII transfers.” No argument from us. Sitting by him will be our friend the Independent Expert Nick Dumbreck, the leader and consulting actuary at Millimans, and former president of the Institute of Actuaries.
To quote the line from Braveheart: “The Almighty says this must be a fashionable fight. It’s drawn the finest people.”
Does that resolve the mystery we reported here? Not yet, but stay tuned.