Legal & General started 2005 in style with worldwide sales in the first quarter 43 per cent ahead of last year.

UK life and pensions led the way with sales equivalent to £233 million in annual premiums, a 47 per cent increase

Within this, group life and pensions sales rose by 117 per cent to £50 million, while retail investments were up by 92 per cent to £75 million, despite a 31 per cent fall in ISA sales.

Worldwide new business sales for the first three months of the year reached the equivalent of £307 million in annual premiums. Although this was well ahead of most analysts' expectations, L&G's shares dipped 11/2p to 106p after David Prosser, chief executive, described the sales increase as "flattering for this quarter".

If L&G achieves sales growth of 15 per cent for the rest of the year, as he forecast in February, "then we would still regard that as a very successful year", Mr Prosser added.

The total was boosted by a one-off £32 million from the restructuring of a number of Barclays' UK funds, for which L&G provides unit trust products.

L&G said it continues to benefit from consolidation in market share among life assurers in the UK and that it expects to continue to build its market share profitably throughout the rest of this year.

Asked about the outcome of Monday's tribunal hearing to rule on whether to reduce a £1.1 milliom fine for misselling imposed on L&G by Financial Services Authority, Mr Prosser said "We'll just have to wait".

He welcomed the FSA's decision to review its own enforcement procedures in the light of criticism from the tribunal.

" We would expect the review to come out with a structure and process for enforcement and adjudication that will be fairer than the one we felt we participated in originally," he said.

Mr Prosser is due to retire in April next year. L&G has appointed an executive search firm to look for a successor.

Chairman David Margetts said the group had appointed recruitment consultants to identify possible candidates from outside the company.

"We have a pool of excellent managers within our business from which to select the new chief executive, but we have thought it right also to look outside the company, so that when we make our decision we will know that we will have looked at the very best people available," he said.

Mr Margetts added that interviews are under way.