Fitch, the international rating agency, has warned that Standard Life, the UK mutual insurer, could be forced to pay a high price on its £750m (€1.1bn) subordinated bond after holding extensive talks over its solvency with the Financial Services Authority.

Standard Life, which has not yet appointed any investment banks to underwrite the new bond, is not expected to launch the deal until the second quarter of 2004 at the earliest. Proceeds from the bond will be used to help finance the insurer's future growth and strengthen its financial profile.