THE WAY the insurance sector is regulated is to be changed in order to implement the Solvency II directive, which comes into effect on 1 January 2016.
The Prudential Regulation Authority (PRA) is consulting on proposed changes to its rules. It said that it would set out a regulatory framework to “ensure that those individuals who run insurers have clearly defined responsibilities and behave with integrity, honesty and skill”.
The proposals include the introduction of a new senior insurance managers regime. The PRA stated that this regime would not be the same as the one suggested for banks.
According to the regulator, the consultation paper relates to all insurance and reinsurance firms within the scope of Solvency II, and to the Society of Lloyd’s and managing agents.
Andrew Bailey, chief executive of the PRA, said: “Ensuring that senior managers of insurers are accountable supports our objective that firms should be run in a safe and sound manner.
“Policyholders are best served by insurance companies with senior managers who can be held to account and who are individually responsible for the decisions they make.”
The consultation will close on 2 February 2015.