A feature common to all policies is that the insurer smooths

A feature common to all policies is that the insurer “smooths” the return, so that a portion of the return is held back in good investment years to make up in part for bad years. But few systems are similar to Britain’s, where companies pay reversionary bonuses ­ which accrue every year and are guaranteed ­ and terminal ones ­ paid out when the policy matures. Terminal bonuses also grow annually but can be taken away at any point up to maturity if the stock market plunges.So far Mr Tiner has said the FSA supports the twin bonuses approach. But behind the scenes the FSA is working on changes to be introduced in 2004 under its integrated rule book for regulation of banks and insurers. Most radical of its ideas is to force insurers to guarantee not just the annual bonus but also the terminal one, on the basis that policyholders have a reasonable expectation to be paid an extra lump sum at the end.This comes on top of the FSA’s intention to tighten regulatory reporting so that insurers cannot use fancy financial work such as reinsurance contracts to underwrite the guarantees. Insurers argue that both initiatives could have dire consequences because they might force life offices out of investments in equities and into gilts.

Historically, Britain’s with-profits industry has invested between 70 per cent and 80 per cent of its funds in equities. It is keen to be able to continue doing this in an attempt to make up for some of the poor returns of this decade.While the structural and corporate governance changes seem more radical, many experts believe it will be the simple task of explaining with-profits more clearly that will transform the industry. The contracts last year performed better on average than unit trusts (see our table) and have done so for six of the past 12 years. Contrary to common suspicion, most insurers have also not held back cash which rightfully belongs to policyholders.Mr Cazalet said: “This year will be tough for life offices. But with-profits have recently done much better than if you were directly invested in the stock market and if life offices had better consumer disclosure they would not have run into half of the difficulties that they face.”. If ever there were a symbol of Gap’s success, it was Sharon Stone’s appearance at the 1996 Oscars ceremony dressed in one of the store’s black turtleneck sweaters and an overblown Vera Wang skirt. Wang’s skirt could only be described as a number and, in this, it was entirely predictable.

The Gap sweater, however, couldn’t have been simpler – less starry, if you will.Stone stood apart from her skin-flashing, paparazzi-courting contemporaries: mixing high fashion with great basics is, after all, the way most people would, if they could, choose to dress.Head-to-toe designer clothes horses is not what the world needs.And for many years, the best place to go for great basics was Gap The store had the finest white T-shirts, especially for men. It had the most comprehensive and well-organised selection of jeans and chinos. It had simple knitted sweaters with various necklines and in great colours to suit all tastes and sizes. It had great blouson jackets, easy drawstring waist trousers, and perfectly cut and reasonably priced macs.The fabrics were good enough to convince consumers to spend more than they would for any cut-price brand. Above all, Gap never stooped to anything so pedestrian or frivolous as fashion. Of course, the collections evolved, tweaked so as not to frighten a fashion-conscious clientele with anything as scandalous as a dodgy hem-length or an ill-placed waistline, but this was barely visible It simply wasn’t the point.But that was then. For some time, high fashion has been too visible at Gap for its own good.

After all, the super-stylish celebrities that graced its once stellar ad campaigns were just as unlikely to travel to the store for anything even remotely directional as we were. If we wanted designer denim, we’d save up for Marc Jacobs or Chloe. If we wanted a great, functional pair of jeans, we’d go to Gap. But we’d be hard pushed to find them amid the low-rise, skinny-legged, boot-cut, cropped-at-the-ankle designer imitations.Just like Marks & Spencer, Gap appears to have forgotten its classic status. And just like Marks & Spencer, Gap is the last place anyone on the planet who cares about such things would buy overtly fashionable clothing.