Royal London is calling on government to honour its initial coalition commitment to promoting mutuality in financial services.
The insurer welcomed the FSA's consultation paper last December, Mutuality & With Profits: a way forward, and said it was vital capital business was looked upon as both money from with profits policy holders and protection and pensions policyholders, as opposed to just the latter.
Gareth Evans, head of corporate affairs at Royal London, said: "We need to make sure the mutual can operate under the new rules that come out of the consultation and that the different structure of the mutual is taken into account.
"The review the coalition put out last week had good and worthy stuff but there was not a great deal about non-bank mutuals and thus the insurance sector. It has not done anything to promote it but it is interesting that the FSA has picked up on the strength the mutual can bring to the industry."
He added the signs were positive with the FSA consultation but if the new rules did not support mutuality writing protection business would become constrained.
Royal London is heavily involved in the FSA's CP12/38 consultation which closes 19 March.
The Government in its Coalition Agreement gave a commitment to "bring forward detailed proposals to foster diversity in financial services, promote mutuals and create a more competitive banking industry".
