PRA to have specific statutory objective for insurance

The Government’s financial regulation White Paper and draft Bill published today include a new proposal for “a specific statutory objective governing the Prudential Regulation Authority’s responsibilities for the insurance sector”.

According to HM Treasury, the White Paper has been extensively informed by responses to February’s round of consultation, resulting in two further new policy proposals as follows:

An updated and enhanced competition regime under the Financial Conduct Authority (FCA); and

Steps to strengthen the handling of cases of widespread consumer detriment, including misselling.

Commenting on developments, the director general of the Association of British Insurers, Otto Thoresen, says: “It is good news that the Government has recognised that insurance must be given proper consideration in the new regulatory structure, and that the Financial Conduct Authority will have to promote competition.”

He adds: “However, we are disappointed that the Government has not set out exactly how the links between the different regulatory bodies will work in practice.”

Subject to the progress of pre-legislative scrutiny, ministers hope to introduce the Bill later this year.