Regulation of UK industry set to intensify
The UK insurance industry will escape the “regulation revolution” facing banks but can expect closer scrutiny from regulators in coming years.
In a speech to the Association of British Insurers conference last week, Financial Services Authority Chairman Lord Adair Turner promised “a revolution in our approach to the regulation and supervision of banks, investment banks, and shadow banks,” but added that for insurance “there is no equivalent need”.
Citing 2004 capital regime reforms, a distinct risk profile and strong progress made on European Solvency II regulatory requirements, Lord Turner said UK insurers are well placed to cope with current economic conditions.
“The insurance industry has broadly welcomed the need for greater European commonality in insurance regulation and we believe that we have got most of the features of the agreed way forward right,” he said.
But he warned insurers that closer supervision of the sector is inevitable.
“We need to reinforce our capability across all high impact firms,” he said. “There can be no return to light-touch regulation and supervision. That era is over.”
In a speech to the Association of British Insurers conference last week, Financial Services Authority Chairman Lord Adair Turner promised “a revolution in our approach to the regulation and supervision of banks, investment banks, and shadow banks,” but added that for insurance “there is no equivalent need”.
Citing 2004 capital regime reforms, a distinct risk profile and strong progress made on European Solvency II regulatory requirements, Lord Turner said UK insurers are well placed to cope with current economic conditions.
“The insurance industry has broadly welcomed the need for greater European commonality in insurance regulation and we believe that we have got most of the features of the agreed way forward right,” he said.
But he warned insurers that closer supervision of the sector is inevitable.
“We need to reinforce our capability across all high impact firms,” he said. “There can be no return to light-touch regulation and supervision. That era is over.”