Welcome to this edition of our Insurance Regulatory eBulletin, which aims to keep you updated with significant regulatory developments and their implications across the insurance sector.
I wish all our readers a happy and prosperous New Year and we look forward to keeping you informed of regulatory developments throughout 2020. 2019 has seen some significant regulatory developments including the extension of the Senior Managers and Certification Regime (SM&CR) to all financial services firms. Brexit continues to cause some regulatory uncertainty (despite the election result) and may mean that there is more change to come. December saw a focus on operational resilience and the potential effects of climate change by the regulators. Both of these topics will continue to be a focus as we move into 2020.
I hope you enjoy reading this latest update. Please do not hesitate to contact myself or your normal BDO contact if you have any concerns over any matter highlighted in this update.
Download the December 2019 update
A relatively quiet month from a regulatory perspective as ‘election purdah’ struck in the UK. There were some substantial enforcement proceedings announced by both the PRA and FCA.
A bumper month – particularly if you enjoy regulatory reading. EIOPA has issued an 878 page tome on its proposals for modifying the current Solvency II Directive and related regulations in 2020. The proposals include changes to the long-term guarantee measures, new regulatory tools for macro-prudential issues, recovery and resolution, and insurance guarantee schemes. There also proposed revisions to elements of freedom of services provisions, reporting and disclosure, and the solvency capital requirement. The PRA was busy updating various supervisory Statements relating to Solvency II whilst the FCA has been considering the effects of climate change, the changing nature of regulation and what machine learning might mean for consumers. The FCA also issued an interim report on general insurance pricing practices and its next steps in this area.
Another very quiet month on the regulatory front probably reflecting both the time of the year and the continuing uncertainty over Brexit. The FCA have been busy reminding firms of the need for appropriate Brexit planning and updating their SM&CR guidance. EIOPA has been considering cyber risk from both underwriting and operational risk perspectives and the PRA have issued a consultation on the Prudent Person Principle and finalised policy on liquidity risk management for insurers.
A very quiet month on the regulatory front probably reflecting the time of the year! I hope that you and our regulators have been enjoying your summer break. EIOPA has published a consultation on its Solvency II remuneration principles and issued its latest Risk Dashboard. The PRA have released the results of their work on proxy modelling and the FCA have issued a reminder to insurers of the end of the transition period for the Senior Managers & Certification Regime together with some lessons for implementation arising out of its review of the regime in the banking sector.
A busy month on the regulatory front from both the European and UK regulatory perspective. EIOPA has issued a series of consultations related to the 2020 Solvency II review and in particular on Solvency II reporting and disclosure and IDD implementation and on cloud outsourcing. The PRA has been looking at Solvency II remuneration policy and has published its findings. The FCA has been following its TCF agenda in particular considering Intergenerational Differences, vulnerable customers and travel insurance customers with pre-existing medical conditions accessing suitable travel insurance. The use of AI and related digital ethics has been considered by EIOPA and the FCA. The UK has a new Prime Minister and the Bank of England and the PRA / FCA have been tidying up the Brexit planning. Time for a rest – so if you are going away enjoy your holidays.
A relatively quiet month on the regulatory front from both the European and prudential regulatory perspective however, the PRA has issued its Annual Report, the FCA has been a little more active and has published some large enforcement fines relating to Bank of Scotland and Raphaels Bank. It has also issued its first Annual Perimeter Report.
To cope with the Brexit uncertainty, the FCA has confirmed the extension of the Temporary Permissions Regime and, both the PRA and the FCA, have made speeches indicating their hopes for the future of regulation post Brexit in the past month.
The PRA became the first regulator in the world to highlight its concerns for climate change on the economy and financial sector through its publication of a Policy Statement setting out its regulatory expectations on this topic.
Brexit continues to make the political headlines and the uncertainty of the outcome is reflected in the regulators’ preparations for a no-deal Brexit which have resulted in more guidance and statements during the past month.
There has been a flurry of activity from both EIOPA and the FCA around the continuing uncertainty of a possible no-deal Brexit.