The review “will likely be to the detriment of the profitability of insurers,” according to a London-based analyst.

(Bloomberg) — U.K. insurers slid in London trading after regulators said they plan a probe into policies stretching back to the 1970s, the second government threat to the industry’s earnings in as many weeks.

The Financial Conduct Authority will publish a plan of its priorities for the year on March 31 that will include an examination of how long-standing customers in the life-insurance market have been treated, a spokeswoman for the London-based regulator said in a statement today.

Shares of Prudential Plc, Aviva Plc, Resolution Plc and Legal & General Group Plc tumbled, pushing the FTSE 350 Life Insurance Index down 6 percent. About 6 billion pounds ($10 billion) were wiped off insurers’ market value, adding to 3.6 billion pounds on March 19, when Chancellor of the Exchequer George Osborne’s budget scrapped rules that pushed retirees to buy an annuity.

The review “will likely be to the detriment of the profitability of insurers,” Fahad Changazi, a London-based analyst at Nomura Holdings Inc., said in a note to clients. “Events of the last few weeks have highlighted how quickly regulation can change.”

The Daily Telegraph reported earlier today that the FCA will review 30 million policies, citing Director of Supervision Clive Adamson. The FCA said today that most policies examined will be more recent than the 1970s and it has no plans to review 30 million policies individually.

Representatives from Aviva, Legal & General, Resolution and Prudential said they weren’t immediately able to comment.

Contract law

Resolution and Phoenix Group Holdings, which focus on operating closed books of older insurance policies, led the declines, sinking 15 percent and 22 percent respectively at noon in London. A spokesman for Phoenix wasn’t immediately available.

Prudential and Aviva, the U.K.’s largest insurers by market value, dropped 4.9 percent and 7.7 percent. Legal & General, Britain’s biggest manager of pension assets, slid 7 percent.

Standard Life Plc, Scotland’s biggest insurer, fell 3.9 percent. A spokesman for the company wasn’t immediately available.

The FCA said it will be talking to companies and no conclusions have been reached. The Telegraph said the review will include pensions, endowments, investment bonds and life insurance sold by door-to-door salesmen on commission, and will consider whether policy holders may be allowed to exit or move to better deals.

“All of these things were written under contract law prevailing at the time,” said Marcus Barnard, an analyst at Oriel Securities Ltd. in London. “Most of these policies were sold via independent financial advisers, with the insurer not giving advice. What we need to see is a bit more detail.”

The FCA said in February that it’s starting a study into competition in the U.K. annuity market after finding that the industry was “not working for consumers.” It also said it would look into the sales practices of the pension providers.

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