30 January 2015

Commercial Risk Europe: IUA concerned by lack of insurance expertise at UK regulator as new insurance supervisor named

The BoE this week finally appointed a new executive director of insurance supervision, Sam Woods. While the International Underwriting Agency welcomed the appointment it warned that there remains a lack of skilled and experienced insurance experts within the UK's regulatory regime.

Mr Woods' appointment will come into effect on 7 April. He will be responsible for overseeing the monitoring and regulation of over 500 general and life insurance firms to ensure they are complying with domestic and international regulatory requirements.

His task is to promote the 'safety and soundness' of insurers and secure appropriate protection for policyholders. He will report to Andrew Bailey, Deputy Governor, Prudential Regulation and CEO of the Prudential Regulation Authority (PRA).

The IUA believes that the regulatory regime for insurance in the UK needs more staff with industry experience gained from holding senior positions in the sector.

This has been a concern for the IUA since the current system of insurance regulation was introduced. Supervision in the UK is now shared between the PRA, the Financial Conduct Authority and the Bank of England.

According to Dave Matcham, Chief Executive of the International Underwriting Association, insurance figures are not well represented on senior regulatory committees such as the PRA board and the Bank of England Financial Policy Committee.

Many fear therefore that there is a real risk that insurers are not appropriately regulated and lumped in with banks.

"The insurance sector is quite different from banking with different supervisory requirements. It does not present the same systemic risk to the wider economy. Given the wide range of responsibilities shouldered by senior regulators it is vital that they maintain an intimate understanding of insurance matters," said Mr Matcham.

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