Andrew Bailey the Deputy Governor, Prudential Regulation and Chief Executive Officer of the Prudential Regulatory Authority (PRA) in a speech to insurers set
out the challenges of the changing regulatory world for insurers. He said
that, like for Banks, the PRA’s approach to supervision of insurance firms will
ensure that senior individuals are properly accountable and thus incentivised
for understanding and mitigating the risks in their business and demonstrating
that they are doing this.
He also talked about Europe: the implementation of the pending EU-wide rules on
capital adequacy for insurers and Solvency II. He reiterated that he felt
strongly that firms had been put to too much expense and management time.
He considered that the official implementation date of 1 January 2014 was
unrealistic and thus had set the new planning horizon of 31 December 2015 for
the US and UK industry. During that period firms will be allowed to use
the significant investment in Solvency II internal models to meet the current
requirements under the Individual Capital Standards, thereby providing for
insurers a smooth transition to the new regime under Solvency II.