The Bank of England and other regulators are developing a regime to improve the accountability of key executives of insurance companies.

Bank Governor Mark Carney told the Institute and Faculty of Actuaries general insurance conference in Wales the link between seniority and accountability has become blurred “or even severed” in parts of the financial sector.

He says the bank will not extend the regime to insurers indiscriminately.

It will consult on including the most senior actuaries, CEOs, chairmen, CFOs and risk officers, making them directly accountable for how a business is run.

“These senior persons will be expected to prove their fitness to regulators before they take up a role, and the onus will be on them to ensure risks are understood, measured and properly considered,” Mr Carney said.

He says low interest rates are causing capital flows into reinsurance, meaning a soft cycle in financial markets is reinforcing a soft insurance market.

This is “a particularly problematic combination” that can test underwriting discipline.

He says the bank’s reform program will promote a more resilient insurance sector by holding the right people to account and implementing tailored, consistent and robust capital standards and standards for global systemically important insurers.

Mr Carney says UK insurers are well placed for the Solvency II capital regime to go live in a year.

“Insurance is at the core of the new Bank of England,” he said. One-third of the bank’s regulatory staff – 200 supervisors and 50 actuaries – are engaged in supervising insurers.