Insurance trade body seizes control of subsidiary by flooding City association’s board
The world’s largest insurance trade body has made a push to take control of one of its subsidiaries, following an ongoing spat between the two groups.
The takeover bid saw the head of the Personal Finance Society (PFS) hit out at its parent organisation, the Chartered Insurance Institute (CII) over claims it had acted “unilaterally” without “leadership or membership consent”.
The takeover bid has seen the CII, the world’s biggest insurance trade body, put three of its own directors on the PFS’s board, in an effort to take control of the trade body for independent financial advisors.
The appointments follow claims of “serious and significant governance failures” at the PFS, on the back of long running dispute over financial issues at the financial advisors’ trade association.
The CII’s appointments mean the insurance trade body will have a total of five of its own directors on the PFS’ board, meaning its influence over the PFS will match that of the body’s own five directors.
In a statement, the CII said its bid to take over the PFS follows the collapse of efforts to independently mediate a dispute surrounding “complex and historical financial issues”.
CII group chair Helen Phillips said: “The CII team has worked hard for many months, initiating independent mediation, and responding to the PFS Board’s demands diligently, professionally and with immense goodwill.”
“Therefore, it is deeply disappointing that independent mediation has failed, and serious and significant governance failures have arisen, which leave the CII Group Board with no alternative but to take this action at this juncture and resolve matters without further delay.”
PFS president Caroline Stuart said the CII’s decision to put three of its own directors on the PFS’ board “came as a huge shock,” as she accused the insurance trade body of having “acted unilaterally” without “leadership or membership consent”.
The CII was set up in 1912 with the aim of building public trust in the insurance and financial planning professions. The PFS is a subsidiary of the CII and is the longest-standing of the insurance body’s professional societies.
“We will take the right steps available to us to consult PFS members as to their views on if such a move by the CII is in PFS members’ and the PFS’s best interests,” Stuart said.
The appointments will CII directors Sarah Howe, Neil Watts, and Azlina Bulmer join the PFS board as “Institute Directors,” alongside existing CII directors Gill White and Mark Hutchinson.