Government welcomes publication of a new code of corporate governance for the mutuals sector

The Association of Mutual Insurers (AMI) and the Association of Friendly Societies (AFS) have today responded to one of the key recommendations of Paul Myners’ review of the governance of life mutuals by publishing an Annotated Combined Code of Corporate Governance for mutuals, based on the Code which has applied to listed companies since 1998.

The Government welcomes publication of the Code and calls on all mutual insurers to review their governance and comply with the Code as a benchmark of best practice.

The Government has called on the AMI and the AFS to monitor and report on compliance with the Code and will be reviewing the impact of implementation.

Ivan Lewis said:

“I welcome the publication of the Annotated Combined Code, which emphasises the importance of effective corporate governance. All mutual insurers must now rise to the challenge of complying with the standards in the Code to ensure that firms operate efficiently and in the best interests of policyholders. The Government will review the industry’s response and its impact.”

Notes for editors

1. Following the Report of the Equitable Life Inquiry lead by Lord Penrose, the Government asked Paul Myners to conduct an independent review into the governance of mutual life insurance offices in the UK. His report was published on 20 December 2004.

2. The Government welcomed Paul Myners’ recommendation that life mutuals should adopt the Combined Code on Corporate Governance, annotated to reflect the circumstances of such companies, and called on the industry to drive forward the Review’s recommendations.

3. The Association of Mutual Insurers (AMI) and the Association of Friendly Societies (AFS) have today published an Annotated Combined Code, which is available on the AMI website www.mutualinsurers.org. The Code, which will apply for reporting years beginning on or after the start of the financial year 2005-06, is intended to apply to all mutual insurers in the UK.

4. The Government will review compliance with the Code in 2008.

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