CUSTOMERS of LV= “risk losing out significantly” under plans to sell it to an American private equity company, an MP has warned.

Labour MP Gareth Thomas told the House of Commons that the Dorset-based business was set to “hand over all the capital and assets its British customers have helped it build up over almost 200 years”.

He has called on ministers to make sure consumers’ interests are protected if plans to sell the County Gates business go ahead.

LV= announced last December that it was to be sold for £530million to Bain Capital, a US investment firm co-founded by former presidential candidate Mitt Romney.

Its general insurance business was sold to Allianz in 2019 and the deal would end LV=’s existence as a mutual business owned by members.

Mr Thomas, who chairs the All-Party Parliamentary Group for Mutuals, raised the issue during a debate about a bill to compensate consumers in another case, the collapse of London Capital & Finance.

A report into that case found the supervision of the Financial Conduct Authority (FCA) to be “wholly deficient” and Mr Thomas raised concerns about the authority in relation to LV=.

Mr Thomas said: “With Liverpool Victoria, the issue is whether it should be allowed to hand over all the capital and assets its British customers have helped it build up over almost 200 years to a privately owned American firm with no commensurate experience, and whether the choices of consumers past and present are being respected.

“I understand that regulators have had a substantial number of meetings with those pushing the demutualisation, but none with the customers and owners of Liverpool Victoria.”

He added: “Consumers lost thousands with London Capital & Finance. The customers of Liverpool Victoria also risk losing out significantly.”

He said the FCA had made “no analysis of what happened during previous demutualisations” and it was “difficult to see how staff could be trained to protect the consumer interest properly during a demutualisation”.

“The FCA has a critical role, and it needs to exercise a little more robust direction to the board of Liverpool Victoria,” he added.

“Similarly, legislation for friendly societies needs updating so that it properly protects consumers’ assets and ensures that regulators can properly protect consumers during demutualisations.”

LV= completes £1billion sale of its general insurance business to Allianz

John Glen, economic secretary to the Treasury, said he would discuss the matter with the chief executive of the FCA.

An FCA spokesperson said: “We are engaging with LV= on the proposed deal.

“Our objective is to ensure that LV= can demonstrate that the deal is fair to its members, and, when they vote on it, they have the information to make an informed choice. We will scrutinise the proposed deal, including its impact on competition.”

LV= has said it has maintained a “close and open relationship” with the FCA and the Prudential Regulation Authority throughout its sale process and has updated them at all the key stages of the transaction.