UK insurance regulators talk ground rules, open up for industry onslaught

The UK's top insurance and banking regulator is ready to fight it out with stakeholders over first principles, releasing an outline of its proposed approach to policy making post-Brexit and giving counterparties three months to ready their fight.

“We intend to take full advantage of the opportunities that the reforms will create,” authors wrote of the lay of the land after the Financial Services and Markets Bill plots the UK’s post-EU regulatory directions.

“In doing so, we aim to address risks and opportunities in a responsive and dynamic manner, appropriately tailored to the circumstances of the UK.”

The question of a mandate for promoting UK competitiveness is laced throughout the report, with near-constant reminder that the industry’s pride and joy was placed as a “secondary” objective, subordinate to primary objectives of “safety and soundness” and policyholder protection.

“Primary objectives rank above our other considerations when making policy,” authors noted. Secondary objectives are only engaged when the regulator is in pursuit of a primary goal and then “does not rank above these.”

When acting to pursue the general objective and insurance objective, we must also, so far as is reasonably possible, act in a way which, as a secondary objective, facilitates effective competition in the markets for services provided by the firms that we supervise.”

Post-EU or not, UK regulators are hemmed in by a long list of framework deals and policy goals established at home or in conjunction with partners. Basel tops a list that runs through the global list of insurance regulatory groupings and the UK’s own net zero commitments.

Regualtors don’t miss the opportunity to ballyhoo steps taken to date, including a declaration on solvency and an ongoing review of insurance reporting requirements.

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