On 11 March 2016 the PRA published an updated version of its approach to insurance supervision document. The revised version of the PRA’s approach to insurance supervision primarily includes changes that reflect the implementation of the Solvency II Directive and the Senior Insurance Managers Regime. Other key changes include:
- An update explaining the PRA’s new secondary objective to facilitate effective competition in relevant markets, in so far as is ‘reasonably possible’, when pursuing its primary objectives. Delivering an appropriate policy framework is key to enhancing this objective, requiring the PRA to consider the extent to which different policy options for mitigating risks to safety and soundness and/or policyholder protection facilitate effective competition.
- The addition of a statement regarding the Bank of England and Financial Services Bill (the Bill). This Bill proposes to integrate the PRA into the Bank as one legal entity by transferring the PRA’s functions to the Bank.
- An update on the expectations of Senior Managers of insurance firms, including the culture and behaviour that the PRA expects firms to have.
A list of the amendments made to the PRA’s Approach to insurance supervision can be found in the Annex of the document.