* OFT to decide on anti-trust probe Friday - spokesman
* Direct Line expected to open order book Friday
LONDON, Sept 27 (Reuters) - Britain's consumer watchdog
could on Friday call on competition regulators to probe the
motor insurance market just as its biggest player, Direct Line,
enters a critical phase in its planned stock market listing,
London's biggest in over a year.
The Office of Fair Trading (OFT), which in May provisionally
recommended the industry be investigated on the grounds that
"dysfunctional" competition forces up the cost of car insurance,
will make a final decision on Friday, a spokesman said.
The watchdog's provisional recommendations for an
investigation by the Competition Commission are usually followed
by a formal referral.
"In most cases where there has been a provisional decision,
this has resulted in a reference," the OFT spokesman said.
The OFT's decision is expected to come as Direct Line begins
accepting investor orders for its shares in an initial public
offering that is likely to value the company at about 2.5
billion pounds ($4.1 billion).
Direct Line announced its intention to float on Sept. 14,
and would under a typical timetable be expected to open its
order book within two weeks.
Direct Line's owner, Royal Bank of Scotland, is
selling the business at European regulators' request to offset
government support it received in the 2008 crisis which left it
82 percent state-owned.
Direct Line and RBS declined to comment.
Analysts have said a competition probe could make it more
difficult for motor insurers to boost their profits through fees
from ancillary services such as the provision of replacement
vehicles.
Direct Line, which also trades under the Churchill and
Privilege brands, is Britain's biggest motor insurer, covering
about one in three cars on the country's roads.
Source: http://news.yahoo.com/direct-line-ipo-may-marred-industry-probe-165035430--sector.html
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